BACKGROUND

A top 10 global asset management firm’s performance measurement and attribution operation had grown over time into a disparate web of feeds, sources and platforms. Internal customers including the front-office and risk teams cobbled together different workflows often resulting in different results. Furthermore, performance calculation workflow had become excessively manually-intensive, creating risk on a variety levels including timeliness and accuracy. Precision and detail of performance reporting was falling behind that of market competitors and client retention was at risk.

ANALYSIS

Meradia coordinated and executed a series of interviews and workshops with all investment, risk and performance groups in the US, Europe and Asia to analyze the existing process and fully understand requirements. We synthesized these requirements into a performance model: functional, data and operational. We were able to specify a single, common global performance measurement methodology for the enterprise. For indexed equity, we designed and specified a bespoke attribution methodology, utilizing a hybrid of strategy and process based techniques to attribute contribution to ex-post tracking error. The requirements drove content for Meradia’s proven selection process which includes RFP functional questions, identification of differentiating factors and use cases for targeted demos. During the selection process we coordinated vendor activity, moderated demos, collated vendor responses and produced a differential vendor analysis that became the primary tool used to select the preferred vendor.

RESULTS

Meradia’s subject matter expertise helped our client to agree on standardized methodologies and identify critical needs. By focusing on differentiating factors and assisting with internal consensus building, Meradia helped our client come to a decision within the original project timeframe. Deliverables included:

  • Comprehensive performance measurement and attribution framework, including functional, data and operational processes and flows
  • Detailed and consistent performance measurement methodology
  • Highly-precise, tailored attribution methodology for indexed equity products
  • Selection of preferred vendor for performance measurement and attribution

Following the RFP and selection project, Meradia was re-engaged to provide implementation support. Meradia continues to work with the client on initiatives including institutional reporting, performance operations organization optimization, staffing and build-out, and product research and development.

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