Century Capital Management (Century) supports its investment advisory business with the Charles River Investment Management System and Charles River FIX Network to streamline workflows, reduce risk and ensure faster and more accurate trade executions.
Client Profile
Century Capital Management, LLC is an independent and employee-owned registered investment adviser, located in Boston. As the adviser to Century Funds, Century provides investment management services to individuals and institutions through small- and mid-cap mutual funds, separate accounts and limited partnerships. The firm traces its origins to 1928 and the founding of Century Shares Trust, one of the oldest mutual funds in the United States.
Challenge
In 2007, Century Capital Management sought to prepare for increased assets under management from new sub-advisor and investor relationships, by gaining new capabilities for portfolio management, electronic trading, compliance and settlement.
“Manual processes and homegrown solutions simply could not support our business goals,” said Jonathan Weitz, Head Trader. “Although we’re a small organization, we serve diverse clients – from large pension plans to mutual funds. We needed to focus on meeting their complex investment needs, not on reviewing numerous spread sheets and manually checking each trade. To be truly competitive, we wanted the same, or better, front-to-middle-office capabilities as larger firms.”
Century’s existing order management system offered limited functionality and lacked scalability to handle growing trade volumes and accounts. To support its small- and mid-cap domestic equity funds and individually-managed accounts, the firm required a fully-integrated solution that would streamline workflows and allow Century to independently add new functionality. Also critical was the ability to monitor compliance throughout the trade day and interface easily with data and back-office providers.
Charles River Solution
In August 2007, Century began implementing the Charles River Investment Management System (Charles River IMS) and the fully-integrated Charles River Network for low-latency FIX connectivity – setting a deadline to fully deploy the system across its domestic equity business before the end of the year.
“Charles River customized the project based on our unique needs, resources and goals,” said Weitz. “Rather than a ‘one-size-fits all’ approach, Charles River helped us define business requirements and provided extensive hands-on training for our two traders, compliance officer and IT support staff.”
To provide Century’s traders with more robust functionality, Charles River tested and delivered interfaces with the firm’s data and back-office providers, including AXYS for
accounting data and Bloomberg for real-time market data. Charles River connected several transaction cost analysis (TCA) providers via Web services feeds.
Charles River also set up and tested direct FIX connections to Century’s 25 broker-dealers for integrated, global electronic trading.
A custom import of Russell Index Data was built to support Century’s funds benchmarked against the Russell 2000 and Russell 2500 Growth indexes, which measure the performance of small cap mutual funds and the small-to mid-cap growth segment of U.S. equities.
In addition, Charles River created a subset of the firm’s compliance rules – identifying and including all required data.
Century fully implemented Charles River IMS – on-time and on-budget – December 10, 2007.
Benefits
“The system helped us to attract new accounts from significant institutional investors,” said Weitz. “In the first year, our assets under management increased by 30%. We couldn’t have accommodated this level of growth without Charles River.”
Century’s fully-integrated system eliminates the risk of trade errors caused by manual processes – giving traders a higher degree of confidence, while cutting in half the time spent on repetitive tasks.
“We simplified workflows, saving each trader at least two hours a day,” said Weitz. “Traders now use real-time data in the Charles River Trader Blotter to build custom calculations that help them better understand market movements and work orders more easily – directly improving execution.”
Fully-integrated FIX connectivity gives traders quick ‘select and send’ access to global liquidity destinations directly from the Charles River Trader Blotter, which also displays FIX indications of interest (IOIs), fills, real-time pricing, trade status, and FIX connection status. According to Maureen Kane, Century’s Chief Compliance Officer, Charles River IMS ensures that compliance rules are in place and can be enforced electronically.
“Automatic compliance processes are absolutely essential for meeting investor demand for accountability – improving risk management and reducing potential for costly compliance violations,“ said Kane. “Before Charles River, compliance rules were applied at trade execution and verified monthly. Now, we can access a complete audit trail at any time during the trade cycle. We know exactly what happens to an order and when.”
Concludes Weitz, “Charles River IMS allows us to focus on what we do best: meeting the needs of investors. We now have a system that’s on par with the world’s largest asset managers.”