Background
DnB NOR Asset Management is Norway’s largest provider of mutual funds and discretionary asset management services, with a total of NOK 540 billion assets under management. Of these, approximately NOK 470 billion represents investments funds from institutional clients, with NOK 250 billion in Norway and NOK 220 billion in Sweden.

DnB NOR Asset Management is a division of Norway's biggest financial services group, which itself has total assets of more than NOK 1,200 billion. The company was established following the merger of DnB and Gjensidige NOR in 2003, and has bases in Oslo, Stockholm, London, New York and Hong Kong.

Integrating legacy systems
Because of the merger and the company’s wide geographic spread, DnB NOR had a number of disparate trading systems. Each of its offices around the world had a separate order management system (OMS), which meant there were different set ups at each desk and several interfaces to the back office which made it difficult for portfolio managers to pass an order from one desk to another. In addition, the likelihood of errors in the data being used was far greater. The net result was that the whole trading process was not running at optimum efficiency.

Johan Erikson, Head of Global Trading of DnB NOR said: “The merger in 2003 was a turning point for us. With two companies now operating as one, trading volumes naturally increased, which led to performance problems - particularly at the main dealing desk in our Stockholm office. It was clear that we needed a new order management system that could be rolled out globally and which would bring together all our diverse systems, integrate with our legacy systems, and, most of all, improve the efficiency of our workflows across all our trading desks.”

Connectivity and usability
To select the right system, DnB NOR conducted a rigorous selection process that saw an initial long list of 10 products narrowed down to three for a detailed evaluation. From this shortlist, LatentZero’s order management system, Minerva, was eventually selected.

Erikson explains: “We were looking for an OMS and a supplier that would deliver against four main criteria. First of all we were interested in a long term relationship with our chosen partner. Then the product had to be able to integrate with different back office systems, that included SIMCorp Dimension in the back office as well as in-house developments. Thirdly, we wanted a straightforward implementation process and, finally, a reasonable price. We were very impressed by Minerva and LatentZero on all four counts.”

In addition, Minerva offered DnB NOR’s traders the functionality they were looking for, combined with a look and feel that users liked. It provided dealers with state-of-the-art technology that best met their requirements, including more efficient work flows and a significantly improved STP.

DnB NOR also wanted connectivity to FIX, as well as other liquidity sources, in order to maintain their connections with top rank brokers. The high level of connectivity within Minerva was a further reason for choosing it above other products on the shortlist.

Finally, DnB NOR felt that Minerva would enable the company to measure performance and best execution more accurately across its global operations. Erikson said: “With MiFID just around the corner, it was essential that we had a system that could prepare for its arrival and support the wider move to more transparent trading practices.”

However, what really clinched the deal was the experience, knowledge and attitude of LatentZero’s people, and the overall feel of the company. “LatentZero was clearly prepared to be flexible, and to discuss different types of partnership, so that we could develop a relationship that suited us both,” says Erikson. “LatentZero’s positive attitude, the usability of its system and the testimonials we received from its very impressive client list persuaded us that they were the right choice for DnB NOR.”

Implementation
Worldwide roll-out started in September 2004 and the system went live across all desks in a staggered sequence throughout Spring 2005. The initial focus was on equity trading, as this was the area that had seen the biggest problems in the existing system. However, it was important that the system could handle fixed income and foreign exchange in the longer term.

Erikson says: “We were very satisfied with the level of support offered by LatentZero throughout the implementation process. There were a couple of unexpected problems, primarily to do with the use of specific characters in the Swedish alphabet. But LatentZero helped us to overcome these and we were impressed by the way they helped us find a solution to the problem.”

Results
DnB NOR has achieved much more efficient work flows and better performance in all its offices since implementing Minerva. They face lower operational risk and better reporting and compliance checks, which are essential in the face of MiFID and other regulations. Having data in one big database also reduces error and offers substantial benefits.