Balancing Art and Science: Returns & Benchmarking Processing for Asset Owners

In the first paper of our asset owner series, we explored the unique business drivers, valuation methodologies, and considerations for private market and external manager processing. Now, in our second installment, we shift our focus to returns and benchmarks.
Asset owners often invest across a diverse mix of private and public market asset classes. But should the same return methodology be applied to both the asset class and the total fund level? Are there acceptable deviations?
Sophisticated benchmarking capabilities are essential for accurately consolidating returns at the total fund level. The complexities of substitution and benchmark specific overrides present challenges driven by various underlying factors. What are these factors, and how can best practices help overcome these challenges? Read on to discover our perspectives and practical solutions

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Meradia’s 2024 Industry Outlook

As we conclude the first quarter of 2024, the financial services industry continues to evolve at a rapid pace, driven by transformative technologies with potential to reshape investment operations. At Meradia, we anticipate a dynamic year will continue to unfold, characterized by innovation, regulatory shifts, and strategic opportunities. Reflecting on discussions with my team and

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2022 Industry Outlook: Investment Performance

Investment performance teams are under pressure to adapt to economic and market volatility amid rapid industry consolidation, operational outsourcing and technological disruption. When working with institutional asset managers, asset owners, wealth managers, insurers, and asset servicing vendors, Meradia has observed the impact of these trends firsthand. Here, we examine the forces at play and how the industry may evolve in 2022 and beyond.

by the Meradia Investment Performance Practice

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What is a Performance Book of Record (PBOR), and Why is it Important to Leverage Data as an Asset and Driver of Growth?

The concept of a Performance Book of Record (PBOR) has continued to evolve across the investment management industry. This paper, which was featured in the Journal of Performance Measurement, outlines the state of PBOR today and why it can help firms leverage enterprise data for future growth.

by Richard E. Mailhos, Principal and Investment Performance Practice Lead

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What Exactly is a Performance Book of Record (PBOR) and Why is it Important to Next-Level Growth Across the Investment Management Industry?

The asset management industry comprises a diverse group of firms offering countless products, funds and investment vehicles that are traded in forever-evolving financial markets. There was a time when the trading book and accounting book differed by days or weeks and clients received reports quarterly. This is not acceptable for firms today that are facing the need for complex asset administration and daily reporting cycles. Whether a firm invests in public securities or private assets, each come with their own challenges including underlying exposures, lagged pricing or fair value impacts to elicit and compare to a variety of benchmarks.
Today, managers of all investment strategies are compiling massive amounts of daily data. Fund strategies, client holdings, return results and analytics combine to support actionable information for portfolio managers, investment boards, clients and regulatory bodies. Most asset management organizations that support this daily function call it a middle office, and the platform upon which it relies is best described as a Performance Book of Record (PBOR). This paper outlines why developing a reliable PBOR is essential for next-level growth of your investment management organization – growth driven by data and confidence from knowing your organization is taking advantage of all the informational assets it possesses.

by Richard E. Mailhos, Principal

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