Alignment Systems
Software design, development and consultancy services for investment banks, asset managers and hedge funds
Look Through
What is Look Through?
Imagine portfolio A comprising a couple of instruments:
Portfolio A (unit trust) | ||
Name | Value | Percentage of portfolio |
Vodafone | £15m | 27% |
Lloyds TSB | £40m | 73% |
Market Value | £55m | 100% |
Portfolio B (private client portfolio) | ||
Name | Value | Percentage of portfolio |
Vodafone | £50m | 50% |
Units in portfolio A unit trust | £50m | 50% |
Market Value | £100m | 100% |
Portfolio B (private client portfolio - look through) | ||
Name | Value | Percentage of portfolio |
Vodafone | £50m | 50% |
"Vodafone" from unit trust portfolio A | £13.5m | (50% * 27%) = 13.5% |
"Lloyds TSB" from unit trust portfolio A | £37.5m |
(50% * 73%) = 37.5%
|
Market Value | £100m | 100% |
Now, if we examine portfolio B we can see that Vodafone is held as a direct equity investment to the sum of £50m and also indirectly through the holding of unit trust A , so overall Vodafone is held to 63.5% of the portfolio, rather than the 50% indicated by the direct equity investment alone.
Functional options | Specifics |
Look Through capability | As long as every instrument that is looked-to (ie Vodafone and Lloyds TSB in the above example) is set up in the database then the system can look through any number of looked-through holdings |
One to many | A single look-through instrument can be looked through to many look-to instruments |
Many to many | Two look-through instruments can be looked through to the same look-to instruments (ie two unit trusts both holding Vodafone can be looked through) |
The act of looking beyond the simple "headline" figures of holdings is generally referred to as "Look-Through", and this is a standard part of the Alignment System.
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