U.S. Bank has added portfolio optimization capabilities to its Pivot client platform, giving collateralized loan obligation (CLO) clients comprehensive insights for faster and more effective trading. Using a set of criteria selected by the client, Pivot Portfolio Optimization sorts through tens of thousands of potential portfolio combinations to identify a combination of investments that best advance the client’s stated objective – typically, maximizing the weighted average spread of the CLO. Clients can include constraints not only from CLO compliance tests, but also custom constraints calculated on internal data that the client uses to make investment decisions.

“CLO portfolio managers often lack tools to integrate their research and optimize their portfolios. Pivot Portfolio Optimization will provide them with a comprehensive view of their accounts and allow them to quickly evaluate and identify trades that will satisfy a given set of goals for their unique portfolio,” says Joe Nardi, U.S. CLO business head at U.S. Bank. “Our offering is highly customizable and we’re able to include client portfolio constraints and metrics. For example, if a client has their own credit scoring, we can use that in conjunction with ratings from the major rating agencies. The tool can even rank order suggested trades by impact, so a portfolio manager can track a shorter list of the most consequential trades. We designed the system for investment action.”

John Stern, president, U.S. Bank Global Corporate Trust and Custody, adds, “U.S. Bank has a distinct advantage in this space because of the strong relationships we have cultivated over the years. Our CLO teams currently work with the vast majority of the CLO market, and have leveraged loan data covering 99 percent of the market, giving clients the confidence to focus on managing their CLO portfolios backed by the data and support of a trusted partner.”