Description of Project:
A $13B AUM Investment Manager with ETF’s, Mutual Funds, Institutional Separately Managed Accounts and Hedge Funds wished to expand their business. In addition to having a full range of investment vehicles, the firm traded a broad range of equity, fixed income and derivative asset classes in Developed, Emerging and Frontier Markets across North America, South America, Europe, the Commonwealth of Independent States, the Middle East, Africa, Asia and Australia. Their biggest growth driver was their ability to develop niche ETF’s that frequently ventured into difficult-to-trade markets or complex securities. The firm recognized that their many Excel-based processes and their lack of a single source for all firm investment data impeded growth potential across all products. Their lack of a verified GIPS Performance reporting program impeded the Separately Managed Account growth.
The firm engaged Sindex to make technology, operational and workflow change recommendations that would help business growth by eliminating manual processes, provide centralized investment data reporting and build up institutional capabilities to improve firm robustness and support verifiable GIPS Performance reporting. The review’s scope encompassed all business groups: Portfolio Management/Research, Trading, Trade Support, Portfolio Administration (inclusive of back-office function from after allocation to clearing, settlement and reconciliation), Accounting, Compliance, IT, Marketing, Sales and Legal.
Sindex conducted interview sessions with all members of Portfolio Management, as well as key stakeholders in all other departments. Ownership was established for Daily, Periodic, and Ad Hoc business function and the procedures documented. Usage of the existing technology stack and current data management processes were reviewed as well.
Sindex delivered a preliminary assessment presentation to validate its findings and recommendations, as well as a final set of documents upon project conclusion. The material included the current state description of the operating model, firm capabilities, functional gaps, and technology stack usage. The future state description included capabilities the firm needed to achieve to a higher level of institutional robustness and support GIPS Performance reporting, and the necessary operating model and technology stack changes to support the improvements. A high-level strategic project description provided Sindex’s recommended course of action. In addition, short-term projects that could eliminate some manual processes and improve data quality on a department level were identified.
Sindex’s roadmap included specific recommendations designed to avoid significant increases in staff. A singular vendor multi-currency, multi-asset class portfolio accounting system across middle and back office functions was recommended versus separate systems to support automation, workflow and data management the post-trade life cycle, accounting & reporting, and performance & attribution. An ASP support model for the new system and the retirement of a proprietary reporting was recommended to limit the growth of the staff as well as minimize the scope of change. The firm followed Sindex’s recommendation on the follow up portfolio accounting system selection and implementation projects, choosing Sindex to lead those projects as well.