INTRODUCTION

Welcome to the next installment of our Vendor Spotlight Series, featuring SimCorp. At Meradia, where we offer you a window into the world of global vendors and their services. In this edition, Lars-Ole Hansen, Senior Director in SimCorp’s Product Management joins Rich Mailhos, Meradia’s Managing Director and Performance Practice Lead, to discuss SimCorp’s new Investment Analytics Platform (IAP).

RICH (Meradia): By integrating advanced data management, performance measurement, analytics, and intuitive reporting, the IAP looks ready to tackle the complexities of modern investment strategies head-on. As consultants, we hear professionals are seeking near-instantaneous reporting.

As the first of its kind for SimCorp, what were the main drivers behind creating this solution?

LARS (SIMCORP): We saw our clients facing a growing number of operational challenges and external factors, impacting how they got the numbers ready for the next day, and this had an impact on cost, efficiency, and user experience. With this technology shift (to the cloud), we were able to eliminate these problems. In fact, we took over the calculation test from our clients and now offer this as part of the service. This means our clients can focus on analyzing portfolios, making the right decisions, and reacting swiftly to new reporting needs from their stakeholders.

RICH: What do you see as your key differentiators from other investment analytics solutions? Do you see this module ever being offered as a standalone solution to the industry?

Lars: With the addition of the new investment analytics service, we are able to offer a market-leading solution for the front office teams. This enables our clients a performance solution for all disciplines that is consistent across asset classes. I don’t think anyone else in the market can offer that today. And furthermore, with the addition of Axioma solutions to the SimCorp family, we now have a unique opportunity, not only to integrate common risk factors across risk and performance but also deliver the new cloud-based performance solution as a standalone offering, together with Axioma’s flush and fill capabilities.

LARS: So, let me ask you, Richard, as consultants, what demand are you seeing for a total portfolio view and multi-asset class coverage of performance?

RICH: Well, a holistic view across all asset classes is a frequent and common demand that we hear from Meradia clients. Performance analytics for multi-asset class portfolios has been an ongoing challenge for the industry. I see this only exacerbated by the recent increase in private market expense exposures. A total portfolio approach aligns with fiduciary responsibilities and the investment decision-making process that we see taking place among asset owners today and other asset managers. I see this only increasing in the future.

LARS: I agree, this is in line with what we see and are addressing, especially among the asset owners.

How do you assess the business values and outcomes for clients transitioning to new performance solutions?

RICH: That’s an important question. We work with our client stakeholders to clearly define success; simply replacing a system or process is never the desired end goal. Business teams expect more from significant projects and investments in technology. When Meradia clients implement performance solutions, I recommend focusing on outcomes across three areas.

1. One is improving performance analytics available to end clients, improving the insights produced off of data.
2. Second, they should see a contribution to streamlining performance data management. Performance and analytics are really a data problem at the heart and are linked to strong enterprise data governance, so we should see some improvement in that dimension.
3. Thirdly, operational change management is a critical and important task. It’s difficult to accomplish at times, but measuring success through increased automation and resource efficiency is the third dimension that I recommend for defining business value and outcomes for our clients.

RICH: Lars, let me ask you, how does SimCorp plan to address the industry’s ever-evolving needs for investment analytics and what other trends do you see?

Lars: In general, SimCorp is starting to take on more business processes from our clients. We provide an investment accounting service and an investment operation service. This service will evolve even further over the next few years.

A more performance-specific trend is the growing interest among asset owners in moving from SAA strategic asset models to a total portfolio approach, as we discussed before, to allocate funding based on risk factors rather than asset classes. We’re planning to support this transition within the next year; again, leveraging the fact that we are now one company, together with Axioma, we can bring these factors in and offer more variety in the attribution models we offer. In general, we have a strong history of developing our software in close collaboration with our customers, which we will continue to do in the future.

RICH: Thank you, Lars. It sounds like you guys have really come a long way. I look forward to seeing how your clients use this solution.

Lars: Thanks, Rich, for inviting me today.

Click here to watch a DEMO of the Investment Analytics Platform.

Learn more about Simcorp’s IAP and Meradia’s performance offerings.

Download Thought Leadership ArticleExpertises: Performance, Risk & AnalyticsAuthors: Richard Mailhos