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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Charting the Course: Enhancing Performance Through Effective Private Market and External Manager Practices

Asset Owners¹ play a pivotal role in the institutional side of the investment landscape, utilizing capital markets to fulfill the long-term needs of beneficiaries. Their objectives are intricately tied to liquidity requirements and investment horizons, overseen by stakeholders such as Boards, Trustees, and Investment Committees. Given the diverse asset classes involved, a blend of internal

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Establish Solid Foundations to Drive Successful Outcomes From Proof-of-Concept Work

The most effective system implementations start by running a Proof of Concept (PoC) to validate a vendor’s ability to support your requirements and highlight areas where custom solution design may be required. A key component of a successful PoC is a clearly defined scope that identifies the types of scenarios, goals, and criteria for completion. Yet we see time and time again firms overlook this element.

by Nicol O’Connor, Manager

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Outsourcing: An Insider’s Framework for Finding the Right Service Provider

Now more than ever, investment managers are outsourcing the responsibility of improving operational efficiency. Service providers taking on this task have enhanced their offerings over the last several years to accommodate the ever-changing complexity of the financial services industry. As such, your firm will need a focused due diligence effort to assess the available options in the marketplace. This includes evaluating the capabilities of different market solutions, the ability to configure versus customize, the overall operational model and, most important, assessing your readiness for the transformation itself. Meradia’s consultants leverage their decades of outsourcing experience to provide a framework for your firm’s next outsourcing project.

by Tom McCorkell, Senior Manager
Jeremy Welch, Manager

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Core Principles To Abide By for Effective Outsourcing

What processes are poised for outsourcing, and what areas should be kept in-house? These are the first questions investment managers should ask before delegating specific business processes to external providers. Outsourcing is complex, but abiding by these three principles will ensure your firm’s decision supports enhanced business operations well into the future.

by Benjamin P. Smith, Client Partner…

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Blinded by Pageantry: the Perils of Neglecting Performance Data Readiness

Once the decision to replace an investment performance system has been made, most firms kick off the effort by mobilizing a formidable complement of resources, all charged with a single objective: selecting the vendor(s) who will make it so. Sponsors, steering committees, stakeholders, managers, experts and analysts are convened. RFPs listing thousands of criteria, elaborate scoring schemes, long lists and short lists are constructed. Initial and targeted demos, proof-of-concept, final selection, management approvals and contract negotiations are conducted. Boxes are ticked. This elaborate pageant commands vast amounts of both internal resources and calendar time — once the winner has finally been announced, a festive celebration is held, and backs are patted all around.

by Mark R. David, CFA…

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Top Benefits of Hiring a Consultant To Manage Your Front-Office Transformation

The front office of an investment management firm is rarely, if ever, managed by a consultant. Key functions such as Head of Portfolio Management and Head of Trading are roles best suited for internal personnel. However, there are certain scenarios when it’s more effective to leave the work to an external resource. Here, we explain how front-office consultants can help your firm through a business transformation in ways internal resources can’t.

by Elizabeth M. Colebrooke, Principal…

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