The COVID-19 pandemic has put additional pressure on credit and debt managers in an area that is already a challenge – the measurement and reporting of risk and performance.
Prior to the COVID-19 pandemic, it was already notoriously difficult to handle performance, attribution and risk reporting in the alternative credit and private debt space. The data is often hard to access and keep accurate. It may be created manually on spreadsheets, using up valuable analyst resources and introducing potential for error. From restructurings and the flow of different ratings data to the creation and comparison of custom benchmarks, portfolio managers know exactly what they want, but getting the systems to produce this information accurately every day and without any army of analysts is something few have actually attained.
Now, in addition to greater market volatility and a flurry of rating downgrades that causes large day-to-day swings, the operational fallout of the pandemic has elevated the need for more granular detail and greater frequency and timeliness of information on performance, risk and investment exposures. It has also increased focus on resiliency, business continuity and remote working arrangements, creating greater demand for online scalable solutions rather than relying on spreadsheets or user-defined applications that reside on the desktop. And this unfolding black swan event has also demonstrated the benefit of outsourcing business processes as well as technology to tap into a global resource pool of subject matter experts rather than relying on a few key people.
As these ongoing challenges have become more urgent, what can be done?
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