Running the Same Strategy Across Multiple Clients and Custodians
You manage one model portfolio, and it is replicated across dozens of client accounts held at different custodian banks. Every rebalance has to be calculated client by client, every order is placed separately, and the same decision fills at a different price for each of them. The strategy is one thing; operationally it is running as many.
The problem
Where replication breaks down
Replication works while the client count is small and the custodians are few. It stops working in three places at once, and all three get worse as the book grows.
Rebalancing does not scale
One decision becomes one calculation per client — position sizes, cash balances and rounding differ in every account, so a single change to the model portfolio turns into hours of per-account work.
Execution prices diverge
The same trade placed separately at several custodians fills at several prices. Clients who bought the same strategy end up with different returns, and the difference is operational rather than investment-driven.
Reporting is reconstructed, not produced
There is no single performance record. Each client's numbers come from their own custodian statement, so the strategy's track record has to be assembled by hand rather than read off one instrument.
The resolution
Consolidate the strategy into a single security
Instead of replicating the portfolio inside every client account, the portfolio is held once, inside a ring-fenced compartment of an independent, bankruptcy-remote issuing vehicle. That compartment issues one certificate with its own ISIN, and each client buys that certificate at their own bank.
The multiplication disappears. You manage one portfolio and place one order; every holder participates through the same NAV, whichever custodian they use. Noray Capital coordinates the issuer, arranger, paying agent, calculation agent, auditor and legal counsel around the compartment as a single mandate — the arrangement described on our securitisation platform page. Noray does not issue on its own balance sheet.
- One instrument with its own ISIN, held identically by every client at their own bank
- One portfolio behind it, rebalanced once instead of account by account
- One NAV and one performance history — an auditable track record for the strategy itself
- New clients subscribe to an existing security rather than triggering a fresh replication exercise
How it works
From model portfolio to one line
The strategy is defined once
Investment policy, universe and rebalancing approach are documented as the portfolio the certificate tracks.
A compartment is opened
An independent, bankruptcy-remote vehicle opens a ring-fenced compartment for the transaction. Noray coordinates the issuer and the agents around it.
The security is issued
The compartment issues a certificate with its own ISIN, admitted for settlement so it can be delivered into any custodian bank.
Clients subscribe at their own bank
Each client buys the same instrument through their existing custody relationship. You manage one portfolio; they hold one line.
Where it is issued
The domicile follows your client base
Where the compartment sits is driven by where your clients hold their accounts and how the certificate has to settle to reach them. If the book is Swiss, a Swiss issuer with SIX SIS settlement is the shortest route into those custody accounts. If it is spread across the EU, a Luxembourg securitisation vehicle settling through Euroclear or Clearstream usually is.
Where cost and speed matter more than EU domicile, a Guernsey protected cell company gives statutory ring-fencing at a lower standing cost, and a Cayman segregated portfolio company is the familiar answer for globally distributed and alternative-asset books. All four run from the same coordination point, so the choice is made per programme rather than once.
Frequently Asked Questions
How does a single security fix order fragmentation?
Every client holds the same instrument, so a rebalance is one order at the level of the portfolio behind it rather than one order per client account. All holders participate in the same execution through the same NAV, which removes the dispersion that comes from placing the same trade separately at several custodians.
Do my clients have to move custodian?
No. The certificate carries its own ISIN and is deliverable into a client's existing custody account through the usual clearing route, so each client keeps their own bank. That is the point of using a security rather than a mandate: the instrument travels to the client, not the other way round.
What happens to clients who want a variation on the strategy?
A variation is a different portfolio, so it is a different compartment and a different ISIN. Compartments are ring-fenced from one another, which means a second or third strategy can run on the same platform without any cross-exposure between them.
Can existing client accounts be migrated into the certificate?
Usually yes, either by subscribing in cash after liquidating the replicated positions, or where the mechanics allow by transferring the underlying holdings in kind. The tax and transfer treatment depends on each client's jurisdiction and custodian, so it should be reviewed before the structure is fixed.
Does this only work above a certain size?
There is no regulatory minimum. There is an economic one: the all-in annual cost of the compartment has to be small enough relative to the assets running through it. That calculation depends on your expected volume and turnover, and it should be modelled against your own numbers before you commit.
One strategy, one instrument
Tell us how many clients hold the strategy today and which custodians they sit at. We will come back with a structure and a written rationale for the domicile.