Wood Struthers & Winthrop Upgrades To Barra's Aegis, And Eyes Linking It to Portia

New York City-based Wood Struthers & Winthrop Management Corp. has upgraded its implementation of Barra Inc.'s equity portfolio analytics software. Wood Struthers has switched from Barra's DOS-based precursors, the so-called I-porch and Activops products, to the Microsoft Corp. Windows-based Aegis portfolio optimization software. The money management firm, with over $3 billion in assets under management, is a subsidiary of Donaldson Lufkin & Jenrette Inc. Meanwhile, the registered investment advisor has set plans to move its offices from one Manhattan location to another sometime in February.

The news of the move comes as Wood Struthers remains in the midst of migrating its portfolio accounting system from Security APL Inc.'s Portvue to Thomson Investment Software's Portia (IMT, Dec. 8, 1995). And Wood Struthers anticipates taking advantage of close linkage between Aegis and Portia once that project is complete.

The firm plans to move from its present address at 140 Broadway to 277 Park Ave. Although further details of the move were unavailable by IMT's deadline, the move is to involve an upgrade of the firm's local area network.

According to Wood Struthers' Hugh Neuberger, senior vice president and equity portfolio manager, the firm began using Barra's DOS-based portfolio optimization software in April of 1995 with the intention of deploying the Windows-based version when it became available. Neuberger says he subsequently attended a Barra seminar that included a demonstration of Aegis, in August of last year; that demo led to the upgrade in the latter part of 1995, he says.

Wood Struthers has a two-position license for Aegis, which allows Neuberger and one other portfolio manager to use the software, he says. Two other equity portfolio managers use some of the output from Aegis, he adds.

The firm uses Aegis in both a standalone and networked version. The reason for the standalone is that Neuberger finds "it more convenient to have it right on my C drive," he says. He uses a Compaq Computer Corp. PC equipped with an Intel Corp. 90 megahertz Pentium chip. The PCs run Microsoft's Windows 3.1, says Neuberger.

While he likes the software package that Barra has put together, he says that "it's really the intellectual content that matters." But the two do go hand in hand, he says. Overall, says Neuberger, Aegis is easy to use, which helps a new user--at least to the Windows version of the product--get comfortable quickly. He says that Barra has structured its Windows-based software so that it is easier to pull out the information that a portfolio manager needs.

New graphics features in Aegis include the ability to explain industry exposures in bar charts. "That's a very handy thing to have," he says. The DOS package didn't have that functionality, he says, although he thinks that there may have been a way to export information to a spreadsheet to make bar charts.

Customized displays are another good feature, says Neuberger. "If I want to see the marginal contribution to risk of a whole column of securities, I can set it up that way. And that's extremely helpful," he says.

Neuberger also says that the arrival of Aegis has solved what was previously a capacity problem with his desktop PC. The executive, who also has Reuters' Quotron service on his PC, says that the combination of a software package such as Aegis and a quote service once ate up much of the PC's memory below 640K. "My experience with the old DOS version of Barra was that I couldn't have both [the Quotron software and the Barra software] up at the same time. They both wanted the same space below 640. So I was stuck rebooting all the time. Now, the problem is gone," he says.

Now, he can flip between an optimized portfolio on Aegis to the Quotron screen, he says. Referring to the standard Windows feature that allows users to toggle from one application to another, Neuberger says: "It's just an Alt Tab." He adds: "That is a great pleasure, let me tell you. You feel very uneasy if you don't know where the stock is."

There is no link between the Aegis and Quotron software, he says. It's just that the "memory management" on Aegis is so much better in the Windows version that both products are not "fighting for a lot of space below 640," he says.

Meanwhile, Neuberger says he is looking forward to the "imminent" portfolio accounting system migration to Portia, which he describes as being in its "final stages." Portia will "automatically" set up files for portfolio managers which means that the Aegis product will be able to "read right off my accounting system. So the whole thing will be very, very convenient," he says. As IMT goes to press, Neuberger expected to have access to some initial files created on the Portia system.

Soon, Neuberger will be able to go from Portia into Aegis and then flip from there into Quotron. "I'll have everything I need, available and open at the same time," he says.

Another advantage of Aegis, besides the memory management improvement, is that the ease of use has been augmented by going to Windows, says Neuberger. One "main advantage to me .... is that the analysis is more helpful if you can get at it quickly," he says, which Aegis allows him to do.

Neuberger says that the new software and the increased integration with the portfolio system allows him to think more about such factors as sector weights and marginal contribution to risk. He says that he pays more attention to such numbers if he can get them quickly.

"It's not that I trade more, [but that] I feel more confident after I've done these reviews. Particularly a piece of data like the marginal contribution to risk, which is something that not a lot of portfolio managers look at. That's a very valuable number," he says.

Market data needs at the firm are met largely by Factset Data Systems Inc. For Aegis, Barra supplies its own data. "Outside the context of risk analysis, I use a lot of Factset data also," says Neuberger.