Background
Gartmore provides a range of investment management services to both retail and institutional clients. These services include equity and fixed income as well as a range of hedge funds, hedge fund of funds and private equity. Gartmore is a part of the Gartmore Group, the international asset management business owned by Nationwide Mutual Insurance Company of Columbus, Ohio. Gartmore Group has assets under management of £41.7billion (US$76.6billion) as of the close of of Q1 2004, and its main offices are in London, Tokyo, Philadelphia, Frankfurt, Milan, Madrid, Stockholm and Jersey.

Automating Pre and Post Trade Compliance
Back in 1998, Gartmore was one of the first asset management firms to recognise the need for new technology to support an increasingly tough compliance environment. Not only was there a constant stream of new rules from regulators around the world, but clients were also imposing complex mandates. Asset managers faced a daily challenge to ensure that their funds were fully compliant.

The problem for Gartmore was twofold. First, they had to find a system that could provide global, 24 X 7 pre-trade compliance management for over 150 investment professionals managing funds trading in a wide range of instruments, including equities, fixed income and derivatives, in a number of different regulatory environments and be capable of supporting up to 30,000 trades a month. Second, whatever they selected had to be capable of seamless integration with their chosen order generation and management software.

Wendy Steel, IT Director of Gartmore, first came across LatentZero when a colleague, who had worked with the founding members of LatentZero at another company, remembered their rules-based Sentinel compliance software and suggested it at a meeting. Although several other solutions were under active consideration by Gartmore at the time, she called LatentZero and asked for a demonstration.

It soon became clear that Sentinel had the potential to offer Gartmore exactly what it needed.

“Sentinel was clearly designed to be a scalable, robust, real-time product,” said Wendy Steel. “The data design and the rules library fitted in with our architecture and supported the way we managed funds. The pre-trade functionality was what we wanted and conceptually the product was ahead of anything else available on the market.

“Whilst there was work to be done to develop Sentinel before we would be happy to introduce it into our production environment we were confident that the product had the potential to become the market leader. We felt that we could work with the team behind it to develop it, prove its capability and integrate it with our order generation and management system. LatentZero’s commitment to developing the product meant that we felt that we were buying into tomorrow’s technology rather than today’s. In spite of the prototype nature of the product, the decision to go with LatentZero ended up being an easy one.”

Implementing Sentinel
A team from LatentZero and the Gartmore project team under the direction of Wendy Steel worked together to a tight deadline, initially to prove that the integration of the Sentinel restriction checking routines with the order generation system ( Longview) was feasible.

The implementation of Sentinel and integration with Gartmore’s order management system went more smoothly than anyone hoped. After six months, a pilot, designed to test the quality of the integration, went live in Gartmore’s Tokyo office. One of the key points of interest during the pilot was how well Sentinel’s rules engine would perform.

“We had to prove to ourselves that we had got the data integration right and that the rule library had been set up in a way that would support a high volume of order generation and compliance checking as part of a global 24/7 trading operation.”

The pilot was a success and 4 months later, as part of the order generation and management implementation, Sentinel was rolled out worldwide.

The Benefits
Sentinel enabled Gartmore to be one of the first fund management firms to have a global pre and post trade compliance system totally integrated with its order management system.

Wendy Steel’s confidence in LatentZero has paid off. LatentZero has maintained a high level of service and support, even though the company is now much bigger than it was when Sentinel was first implemented. Gartmore has upgraded Sentinel several times, benefiting from the latest product technology as it has become available.

Sentinel is now established as the core of Gartmore’s interactive and batch checking of compliance rules, helping to ensure that funds are managed in compliance with their mandates and the appropriate regulatory environment.