Arcfina and Quay Partners: Supporting an Emerging Credit Manager with Integrated Portfolio and Risk Management, Operations and Regulation
Overview
An emerging European credit manager needed institutional-grade front-office portfolio and risk management capabilities, while Quay Partners provide outsourced middle and back office services and regulatory infrastructure. To meet these requirements, Arcfina and Quay Partners developed a joint operating framework that connects institutional trading infrastructure with front-office portfolio and risk management.
The result is that investment teams receive timely portfolio valuations, credit risk analytics and performance attribution throughout the trading day, enabling faster, more informed investment decisions. At the same time, Quay Partners meet the middle and back office and regulatory responsibilities, thereby delivering clients institutional-grade operational support and front-office visibility and control.
As credit investment strategies become increasingly complex, firms require operating models that can deliver consistency across execution, operations, risk and reporting. The resulting operating model enables Quay Partners to manage middle and back office and regulatory workflows, while Arcfina provides the portfolio management, valuation, risk and performance attribution capabilities used by the investment team.
Key highlights
- An integrated operating model spanning execution, post-trade processing, portfolio management and risk
- An automated intraday data flow between Arcfina and Quay Partners
- Trade lifecycle updates including amendments, cancellations and reconciliations delivered throughout the day
- Intraday portfolio valuation and credit risk analytics including CS01, yield to worst, and stress tests
- Performance attribution measures to decompose portfolio performance into carry components (such as pull-to-par and coupon income), price, and FX attribution
- Reduced operational friction supported by automation and streamlined workflows
- Clear allocation of responsibilities between operational infrastructure and front-office analytics
The challenge
The client required institutional-grade portfolio management and risk capabilities while retaining the operational expertise and infrastructure already provided by Quay Partners. While Quay continued to manage middle and back office and regulatory responsibilities, Arcfina was introduced to provide the front-office portfolio management, valuation and risk capabilities needed by the investment team. The challenge was to integrate these complementary functions into a single operating model that delivered timely investment insight alongside robust operational support.
A collaborative operating model
The partnership between Arcfina and Quay Partners was designed to address these challenges through a clearly defined and integrated operating model. Rather than viewing portfolio management and operations as separate processes, the solution creates a connected workflow that supports the full lifecycle of investment activity.
Within the model, Arcfina provides the front-office portfolio and risk management environment, enabling investment teams to monitor intraday positions, exposures, analytics and portfolio risk using consistent, up-to-date information. Quay Partners middle and back office and regulatory infrastructure through its operating platform.
The solution
Key capabilities include:
- Continuous delivery of trade lifecycle events, including amendments and cancellations
- Arcfina position exports are shared back with Quay so the front-office and middle and back office environments can be reconciled and kept aligned
- Quay Partners maintains the book of record for regulatory reporting and NAV sign off
- Arcfina supports portfolio management, valuation, credit exposure monitoring, CS01, yield analytics, spread stress testing and performance attribution
The results
By combining Arcfina’s portfolio and risk management capabilities with Quay Partners’ operational infrastructure, clients benefit from a more efficient and scalable operating environment. Automated workflows reduce manual rekeying, support trade lifecycle event processing and provide reconciliation between the front-office and the middle and back office environments, improving consistency across the investment process. Investment teams gain access to timely portfolio valuations, credit risk analytics and performance attribution throughout the trading day, while maintaining robust control over execution, trade processing and regulatory responsibilities.
The partnership provides a scalable operating model that supports growth while maintaining consistency across front-office and middle and back office functions, giving investment and operations teams confidence in the information they rely on throughout the trading day.
A strategic partnership
By combining complementary capabilities across execution, operations, portfolio management and risk, the partnership between Arcfina and Quay Partners provides clients with institutional grade infrastructure while preserving the flexibility required to support evolving investment strategies.
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Arcfina supports institutional credit managers across portfolio management, risk, and operations.
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