BACKGROUND

Meradia was retained by a multi-family office with $8 billion AUM to assess their investment application stack, organizational design and operational processes. Like many investment management firms, the company had grown over time and their system stack had become patchworked, resulting in an operating model that had become overly manual and inefficient. Our initial assessment determined that most of the functional pain could be traced back to a lack of a fit-for-purpose investment book of record (IBOR). In addition to the IBOR need, the multi-family office sought a comprehensive accounting package that could meet multiple operational objectives including IBOR, general ledger, participant record-keeping, reconciliation and security-level investment performance; along with suitable reference data to support complex security valuation. In addition to US Equities and Bonds, the family office held overseas investments, direct investments, co-investments, private equity, real estate, bank loans and derivatives, including swaps.

ANALYSIS

Meradia worked closely with stakeholders to specify, document and prioritize core requirements. It was understood there was not going to be a one-size-fits-all solution so the challenge was to find a platform that would support as much of the operations as possible. Knowing this at the outset, we organized the RFP according to function such that the strengths and weaknesses of different solutions could be readily ascertained and the client could easily decide the impact of adding supplemental components to a strong core platform.

RESULTS

We recommended a solution that supported 70% of operations, including partnership accounting, reconciliation, IBOR and performance measurement. The remaining 30% was supported by proprietary solutions and enhancements to existing general ledger, which was a bonus assuming it would need to be replaced. Additionally, we specified cross-functional requirements like look-through performance reporting (combining partnership accounting with their investment performance calculation objectives) that our client overlooked.

Throughout the process, we shielded client teams with busy day-to-day schedules from taxing vendor interactions. We quickly narrowed down our client’s list of 30 potential vendors, reviewed the RFP line-by-line with each vendor, explained our client’s particularly unique requirements in detail, worked closely with vendor technology teams to load specific data sets for demos and answered a daily deluge of ad-hoc questions from various stakeholders.

After consulting with vendor-specific SMEs, we worked closely with the client and vendor to create demos that would specifically highlight both product strengths and areas of weakness during targeted demos. We coached the client before and during the negotiation process on pricing, implementation fees and service-level agreements.

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