Perfecting Asset Management from Front-To-Back
Every asset manager wants a perfect front-to-back solution yesterday. Unfortunately for them and their outsourced asset servicing providers and technology solutions, perfection is not yet attainable. Cost pressures, geopolitics, myriad data sets, and increasingly complex asset classes will keep this challenge front-and-center for any key participant in the investments lifecycle.
While the leading asset servicers have tremendous capabilities, we continue to hear from clients that there is some missing service, process, or functionality that keeps them up at night. Manual workarounds, imperfect linkages between merged datasets, a lack of public information (e.g., private placements and other alternative assets), and an expectation to follow-the-sun regarding international investments, are still causing these nightmares for a vast majority of asset managers.
Asset servicers continue to advance their technology, but there are incredibly complex and constantly evolving functions included in the massive scope of a front-to-back service offering. From Order Management Systems / Best Execution through the Middle Office and all the way to fund administration functions such as financial reporting and tax, there are countless areas that all require specialty processes, technology, and expertise. On top of that, clients frequently complain about data quality and the ability to aggregate it, and yet they continue to push the envelope with their providers regarding custom requirements. When service providers spend an inordinate amount of time on client-specific requirements, file delivery hygiene, and custom reporting, that means less time is spent focusing on their core product to ensure it can capture future additions and modifications to the overall data and system architecture. Never mind the resources required and headaches surrounding reconciliation, as well as mitigating risk in each of these diversions.
Key Factors in Complex Portfolio Management:
Start of Day (SOD) v. End of Day (EOD) data and the respective adjustments
A 24-hour clock approach incorporating all projected and settled activity across multiple time zones while ensuring all ops, tech, and data delivery teams are on the same page given they all have specific cutoffs and dependencies on internal and vendor processes and delivery
Data formats and templates (we’re not all simply using Excel on laptops anymore)
Futureproofing and enhancing products and services (e.g., Generative AI, distributed ledger technology, UI enhancements for smartphones and wearables)
Data integrity and compliance with licensing
All of these factors require firms to rethink how to consume, transform, and deliver their data (timely, if not instantaneously) in a multitude of ways. Both asset managers and asset servicers need to work together on best-in-class solutions.
About Clarendon Partners
At Clarendon Partners, we bring a unique blend of expertise in service providers, front-to-back operations, outsourcing arrangements, and effective oversight models. Our mission is to help you design functional frameworks that enable operational excellence, ensuring seamless navigation through the intricacies of asset management.
With experience in evaluating and working with preeminent investment technologies, Clarendon Partners works with you to unlock the full potential of your organization and prepare you for the challenges and opportunities that lie ahead.
Learn more at clarendonptrs.com
