THE INVESTMENT PERFORMANCE TECHNOLOGY LANDSCAPE

Performance reporting technology has evolved to suit the needs of advisory firms and broker-dealers that serve clients who want a more interactive experience. Virtual meetings have become the norm rather than the exception. Client portals often have reporting built into the user interface to facilitate the online delivery of performance analytics.     

In this article, we highlight the features of several popular performance reporting systems and review trends and technological developments that are improving the financial services industry.  We’ve included the following vendors in our evaluation:

  • BNY Eagle Data & Analytics Solutions
  • FactSet B-One & PA (B-One Performance, Attribution, and Composites Management)
  • Opturo (All modules)
  • Ortec PEARL
  • StatPro Revolution Analytics, Performance (Now known as Confluence Revolution)
  • SS&C Sylvan

Trends in Investment Performance Measurement Systems

Performance reporting systems have historically struggled to process the large volume of data required for advanced portfolio analytics. This is partially due to data aggregation methods but also involves the management of the security master and data index. Here are a few examples of how different companies have overcome these challenges:

  1. BNY Eagle Performance has invested heavily in enhancing tools commonly found in front-office analytics engines. They have robust capabilities for multi-currency, multi-asset attribution, and ex-post risk not commonly found in performance solutions.
  2. StatPro Revolution Analytics, Performance (now known as Confluence Revolution) launched in 2011, but Revolution Analytics required basic performance inputs from an external source, so they added Revolution Performance in 2016. Today, they can compete with StatPro Legacy. 
  3. FactSet’s tool followed a similar path to StatPro. It fell short of the full transaction-based performance inputs preferred by investment performance professionals. In 2017, FactSet acquired and integrated B-One from Bi-Sam, so it can now provide front-office analytics with transaction-based performance reporting. 
  4. Opturo has always been a flexible platform architected by mathematicians with an interesting approach to handling required data inputs. While it does have analytics capabilities, many of them are configured to order rather than out-of-the-box. 
  5. Sylvan  (SS&C Sylvan Sunsetted. SS&C Aloha) and PEARL (Now Pearl 8) have added sophisticated user-defined attribution features.

The Role of Data Management in Performance Reporting

Successful performance solutions have a strong data management backbone. Performance data management capabilities must load and transform, pre-calculate inputs, highlight exceptions and give performance managers summary indications of overall data quality with drill-down features to investigate underlying errors. 

Governance features include management dashboards that provide a top-down view of portfolio returns, and data lineage features that preserve and promote data provenance. Eagle Performance, FactSet B-One, and StatPro Revolution Analytics, Performance (Now known as Confluence Revolution) Performance all include user-friendly dashboards that enable drill-through to the supporting detail.

FactSet B-One, Eagle Performance, and Opturo have robust capabilities that enable users to load and manage key inputs. PEARL enables business users to schedule input jobs with some workflow notifications. Here are some other recent developments to be aware of: 

  • Data aggregators such as RIMES and Bloomberg have improved the quality and consistency of core benchmark and security reference inputs. Most performance tools boast out-of-the-box connectors for these well-used market data sources. 
  • Software vendors like StatPro Revolution Analytics, Performance (Now known as owned by Confluence Revolution)Pro have swiftly entered the data space, providing turnkey solutions. StatPro Revolution Analytics, Performance (Now known as owned by Confluence Revolution) Pro’s recent partnership with JPMorgan could further enhance the product’s ability to deliver Fixed Income indexes and analytics. 
  • Sylvan can be paired with SS&C’s data aggregation platform, SVC, but SVC lacks the breadth of market data coverage offered by FactSet and StatPro. The move to data is not a surprise since simplifying the integration of market data inputs can accelerate the delivery of complex analytics and make features like VaR achievable.
  • Eagle Performance and FactSet B-One earn high marks in delivering easy-to-use, robust data harmonization functionality that transforms data inputs and dashboards to help manage, review, and re-submit data exceptions. 
  • Opturo does not have a data warehouse. Instead, Opturo transforms inputs on the fly between authoritative data stores and the calculation engine, eliminating duplication and the need for subsequent reconciliation between systems. 

Acquisitions, Integrations, and Outsourcing

M&A in the financial services space has been fueling new technology developments for the past decade. High inflation, rising interest rates, and lower economic growth projections slowed that activity in 2023, but analysts are optimistic it will pick up again in 2024. Wealth managers are paying close attention to these acquisitions and what they bring to the table.

Improved API technology is also increasing the capabilities of performance measurement tools. The ability to get real-time data is a game changer. It pressures developers to build the infrastructure to deliver that data to front office client-facing applications. In some cases, firms are electing to build that on their own. Others outsource it to vendors who specialize in that. 

Some performance products include embedded services that enable their product to be more successful. Customers of FactSet’s new capability get basic data reviews and error checks free with that service. StatPro Revolution Analytics, Performance (Now known as Confluence Revolution) Analytics clients get security master coverage to ensure the analytics engine can function as intended. 

The Post-Pandemic Technological Transformation

StatPro (Now known as owned by Confluence Revolution) showed some clairvoyance back in 2020 when they invested heavily in a cloud-centric rewrite. Other providers, many of which are not on this list, have focused on building new API integrations, adding a graphical user interface (GUI), or acquiring companies that offer virtual interaction or real-time data delivery. Blockchain technology is also in play.  

Development in all these areas was accelerated by the 2020 pandemic. Client demand forced a change in advisor behavior. That trickled down to the middle and back offices of brokerage houses and major custodians, sparking a new wave of hybrid and remote business models.  

Another development to keep an eye on is platform integration. The race to become the one-stop shop to meet core operational capabilities end-to-end is ongoing. SimCorp, Blackrock, StateStreet, BNY, SS&C, FactSet, and Bloomberg all seem to be in the race. New players, virtually unknown a decade ago, are creeping up behind them.   

How Meradia Can Help

Meradia’s experts in investment performance, operations, and technology have in-depth knowledge of many of the top-selling systems. Our well-earned reputation for delivering clear, unbiased, and objective analysis guides investment firms through vendor selection to choose a product that best fits the business needs based on an organization’s strengths and technology capabilities. Further, we have the expertise to help prepare firms for their conversion from one platform to another and perform system implementations.

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