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LEARN MOREHow automation technology can help managers master the month-end process
Responsible for extensive due diligence, CLO managers face a number of demands that are often challenging for their middle and back office, especially at month-end. This is when the fiduciary trustee, who is responsible for oversight, receives updates on cash, holdings, ratings, and positions along with data points such as WAL (Weighted Average Life) and WARF (Weighted Average Rating Factor) that must be reconciled with their tests.
Generally speaking, these tests proceed without much friction if the underlying data is accurate and reliable. However, the month-end process requires a massive amount of manual work behind the scenes, typically involving collaboration across teams using a combination of email and spreadsheets. The challenges encountered at month-end, which are exacerbated when managers have multiple CLOs, are leading many to seek an automated solution to help reduce operational risks.
The Importance of Effective Portfolio Management for CLO’s
The complex and dynamic nature of the underlying loan assets in Collateralized Loan Obligations (CLOs) underscores the critical role of effective portfolio management. CLO managers must navigate various risks, including market risk, credit risk, and operational risk, to ensure the stability and profitability of the CLO portfolio.
Leveraging Automation for Risk Mitigation
The solution should be equipped to detect anomalies within reporting cycles, and it should also be able to integrate seamlessly with a variety of internal and external systems. Other features to look for in an automated solution include:
With the use of an automated solution designed specifically with CLOs in mind, CLO managers can establish control over the challenging and chaotic month-end process, increase accuracy by identifying inconsistencies, and improve compliance testing. This strengthens confidence in due diligence for the middle and back office.
IVP Solutions for CLO Managers equips managers with the technology they need to shift away from using manual processes and spreadsheets to run their CLOs more efficiently. With the help of IVP, CLO managers can make smarter investment decisions, streamline their processes, ensure CLO compliance, and reconcile trustee reports through the power of automation.
To learn more, please visit IVP Solutions for CLO Managers or contact sales@ivp.in
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