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.

 

Contacting Alignment Systems

To get in touch mail us at enquire@alignment-systems.com

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