State Street Boston Corp. has launched an investment management software system designed to let portfolio managers customize information for analysis, management, and client reports.
The software, called FolioExpert, is said to help mutual fund and institutional and independent investors manage their assets.
Executives at the $23 billion-asset Boston-based bank said the software is best suited for institutions investing more than $5 billion in assets annually. State Street itself has $2.3 trillion in assets under custody and about $226 billion under management.
Octavio Marenzi, an analyst at Tower Group, a Wellesley, Mass., bank consulting firm, said portfolio management systems are getting more sophisticated as asset managers move away from individual ownership of securities and toward pooled assets, such as mutual, pension, and insurance funds.
"There are more and more sophisticated mathematicians and statisticians running around these companies" who are "looking for the tools to support this kind of analysis," Mr. Marenzi said.
He added that State Street has entered a "tough market," filled with as many as 80 technology companies offering such systems.
The big bank will have "a lot of competition out there," Mr. Marenzi said, adding: "There are a lot of people doing these things, so I don't know how successful they will be."
FolioExpert works with generic-data feeds that deliver information about specific "pieces of the securities universe," said James MacDonald, a senior vice president and head of information technology at State Street.
The software accommodates the variety of formats and codes that various data feeds use by converting the market information into a single data format. Once in a single format, the data can be combined in ways that suit a manager's analysis needs.
Mr. MacDonald defined FolioExpert as a decision support tool on the pre- trade side of asset management. It does not perform fund accounting or portfolio accounting, nor does it calculate portfolio performance against industry benchmarks - State Street has other systems that handle those applications.
State Street officials said the software also can analyze and manage data in multiple currencies.
Mr. MacDonald led a team of between eight and 10 employees that worked of the software during its two-year development.
"We've been building client/server-based architectures for quite a while now," said Mr. MacDonald. He said nearly half of the bank's more than 11,000 employees work on systems or in technology-related areas.
State Street officials said the system will be marketed to both existing and potential clients of the bank.
Sources said the system has been sold for undisclosed sums to General Electric Co., Fairfield, Conn., and to Ameritech Corp., the Chicago-based Baby Bell.
Annual spending on portfolio management systems by U.S. companies hit $345 million in 1995, according to the Tower Group. About $135 million of that figure was spent on in-house systems.
European institutions spent about $340 million on such systems last year, Tower found.
Mr. Marenzi said European-based companies tend to favor in-house development rather than off-the-shelf portfolio management systems. European institutions spent about $210 million on in-house systems last year.