T. Rowe Price Goes Live With GPS, Rebuilds Information Infrastructure

BALTIMORE--T. Rowe Price has gone live with DST International's Global Portfolio System, or GPS, for its portfolio accounting. The installation will serve 400 to 500 portfolio managers, analysts, compliance officers and accounting and back office personnel, and it caps a four-year process that saw DST add front-end features to GPS as part of its contract with the mutual fund company.

DST "developed the interface based on the input of T. Rowe business personnel," says David Seibert, a T. Rowe vice president and the company's manager of investment systems. "They used to just sell people the core middleware and accounting engine that did batch processing."

When T. Rowe first licensed GPS, it was a rules-based transaction processing and accounting engine that allowed for extensive client customization of user interfaces. But DST has since scaled back the customizable components, and, with T. Rowe's help, designed shrink-wrapped user interfaces.

In July, T. Rowe became the first installation to go live with the revamped edition of GPS, version 3.0. The Boston company which sells GPS, DST Belvedere, earlier this month was merged into its larger UK sister company, DST International, which sells the Hiportfolio portfolio accounting system internationally (IMT, September 11).

DSTi has just begun marketing Hiportfolio in the US market. The company is owned by DST Systems of Kansas City, which is one of the largest providers of transfer agency services to US mutual funds. T. Rowe, which has approximately $142 billion in assets under management, is also a client of DST's transfer agency business.

The $142 billion total includes the company's $33 billion international fund business, run by its Rowe Price Fleming subsidiary in London, and its $7.2 guaranteed investment contract business, which is based in Richmond, Virginia. Neither of those groups have been switched to GPS, but Seibert says they may be at a later date.

GPS replaces a service bureau arrangement T. Rowe had with DP Associates of Towson, Maryland, using the SAMS systems for its equities portfolios. Thomson Investment Software's Portia was used for its fixed-income securities.

T. Rowe had been looking for one platform to do both equities and fixed income portfolios, and while SAMS had been providing some fixed income accounting as a back-up to Portia, its lack of an accrual function limited its usefulness for the bond holdings, Seibert says. Accrual accounting adds the value of coupon payments to a debt security's value, but SAMS was essentially limited to just tracking the current market value and the original purchase price. In addition, the system runs on a mainframe, and T. Rowe has been migrating its information architecture to client/server platforms.

SAMS' corporate actions functions were also limited. While it could process dividend payments, portfolio managers could only use it to track stock splits by retyping the data from their spreadsheets.

T. Rowe is running GPS on Sun Microsystems ES 6000 servers with Sun's Solaris Unix. The clients are mostly using Microsoft Windows NT 4.0.

"We have some lingering NT 3.51 clients out there, but we're converting them to 4.0," Seibert says. "Our corporate standard is a 200 Mhz Pentium with a minimum of 32 Mbytes of memory, although usually we have 64 Mbytes."

The installation of GPS is part of a complete overhaul of T. Rowe's information technology infrastructure, Seibert says.

"We replaced a number of feeds from our market data suppliers," Seibert says. The company also installed new trade order systems for both its equities portfolios and its mortgage securities.

"We have GPS integrated with all of our trading systems," Seibert says. "GPS sends back automatic refreshes to our trading systems at the end of its nightly processing."

"Now we're ready to start building on top of that," Seibert says. "We're ready to make sure that all of our market data suppliers are Year 2000 compliant. We're also working with DSTi on better after-tax reporting."

On its equities desk, the company expects to go live next month with Merrin Financial's Sybase upgrade of the Merrin Financial Trading Platform. T. Rowe had been using the DOS-based version of Merrin with a Btrieve flat-file database. The two mortgage-backed securities traders just installed the MBS software from Leading Edge Technologies of New York.

"The biggest part of mortgage backeds is allocations," Seibert says. "But prior to Leading Edge, everything was manual. Leading Edge can do in a couple of hours a process that used to take several days."