J.P. Morgan Asset Management has expanded its relationship with Boise, Idaho-based software solutions firm Clearwater Analytics to streamline services for financial intermediaries and corporate treasuries who invest in money market funds and separately managed accounts.
Clearwater provides pre-trade and post-trade analytical data on separately managed accounts including accounting, compliance monitoring, risk analysis, and performance measurement. It will now incorporate those reports into J.P Morgan’s Morgan Money platform, an open architecture trading platform for institutional investors and financial intermediaries focusing on money market funds.
The platform also acts as a white label service for banks and financial intermediaries where they can purchase it as additional software.
Prior to the partnership, an intermediary who invested in an SMA and money market fund had to move back and forth between Clearwater’s system and Morgan Money when they wanted to research a transaction before executing it. Through this partnership, a person can see all the data at once.
“Bringing these two products together creates a seamless experience for our clients to not only evaluate money market fund allocations and executions but then combines the post-execution with these separately managed accounts to get the global view of the portfolio,” said Scott Erickson, chief revenue officer at Clearwater Analytics.
When a user logs into Morgan Money now, they will have access to a consolidated view of balances, exposures, and counterparty risks. By having access to all this data at once, a person can see how a trade might impact their overall portfolio as opposed to bouncing from one service to the other.
“We have eliminated the hops in terms of getting [an intermediary’s] day-to-day job done,” said Paul Przybylski, global head of Product Strategy and Morgan Money at J.P. Morgan Asset Management.
The impetus for the arrangement came about after J.P Morgan saw an increase in clients investing in money market funds and SMAs, according to Przybylski.
“We have seen more and more clients that have money market fund investments given where rates are today on money market fund products, it gives those investors an allocation of their overall strategy into money funds and those clients had a bifurcated experience that we wanted to consolidate for them,” he said.
J.P. Morgan and Clearwater had been working together for about 10 years when Clearwater began providing reports to J.P. Morgan and its end clients on SMAs. It then began to provide reports on insurance information before expanding into alternative assets, Erickson said.
“We have a track record of working together to grow each other’s businesses and to provide solutions to the clients they manage assets for as well as increasing the flow of assets they’re getting into the business,” he said.
Morgan Money is the latest iteration of that working relationship. Currently it is accommodating the execution of transactions while Clearwater provides the analytical reports. The desire is to eventually allow Clearwater customers to execute transactions from its side of the business, according to Przybylski.
“Ideally...today a client can only initiate a transaction to buy and sell a money market fund out of Morgan Money, but I think I would like to have an ability to do that out of Clearwater as well,” he said. “We have the capability that is already live in production, it’s just a matter of getting it hooked up with Clearwater.”
There is no clear timeline on when this move might take place, however given the fact that the technology already exists, once it is approved it will not take long to implement, according to Przybylski.
As for Morgan Money itself, the platform currently offers all of J.P Morgan’s money market funds, however the firm will be expanding the options to include ETFs by the end of this year, Przybylski said.
“We definitely acknowledge that today corporate treasurers are not necessarily getting into the ETF space, but at some point, they will,” he said. “There are a few that are making that progression.”
The firm will start by offering ultra short fixed income ETF and treasury ETFs. The plan is to make Morgan Money a place for institutional investors to go for all of their investment options.
“We are trying to build Morgan Money to be a one-stop shop for clients like the treasurers to transact in [a variety of funds],” Przybylski said.