The term multi-manager refers to an institution or a fund that invests in a range of other funds managed by different asset managers. The aim is to diversify risk and maximise potential returns. Some multi-manager funds even let their customers choose from a selection of funds they want to invest in.
Multi-manager institutions undertake the resource-intensive task of monitoring, managing and reconciling the data that they receive from various external portfolio managers and other data sources, such as the JSE and FinSwitch. Data usually gets supplied in a variety of formats, as the large numbers of portfolio managers all tend to use different back-office systems.
In some scenarios, external portfolio managers may even use different portfolio codes, security codes, currency codes and other static data.
Performing this task manually introduces the risk of data capturing errors, key man dependencies and reports that aren’t uniform.
Due to the diverse working environment, data would have to be sourced from various locations and input methods, including e-mail, network drives, ftp sites and web services.
All data and files would have to be translated and transformed into a format that can be interpreted by the appropriate in-house system. The relevant reports and data extracts must be available at all times in order for managers to trade efficiently.
The multi-manager solution that we proposed had to crunch enormous amounts of data into smaller, more valuable chunks that portfolio managers can digest easily.
Our proposed system automates the data feeds from external portfolio managers, the JSE, FinSwitch and any other data sources. It also maintains the Assets Under Management, per manager, and manages all Inflow and Outflow transactions to various management companies.
The solution gives users a complete and transparent view of the data, in the form of a comprehensive list of reports and detailed audit trail. It provides a dynamic platform to manage file formats, translations and configurations, minimising the need for more development further down the line.
Some of the key features and functionalities included in our solution:
- Multiple Source Locations enable the sourcing of information from multiple locations e.g. e-mails, FTP sites and network drives.
- Dynamic File Import is functionality that allows users to map new file formats via the front-end.
- Dynamic Configuration allows set-up and maintenance of all system configuration data, like FTP site details, data paths, server paths, mail settings and download schedules.
- Data Translation allows a user to set up and maintain data translations for data received from external parties, e.g. client codes, security codes and currency codes.
- Automated Reconciliations reconcile data from external sources and communicate any major disparities to all relevant parties.
- Escalation System issues escalations and warnings when deadlines are missed, or data is incorrect or incomplete.
- Complete Audit Trail records and logs all actions (system and user-initiated) to provide a transparent view of all data and actions in the system.
- Reporting enables a user to extract exact reports on various business functions, e.g. ageing reports and recon reports.
Our multi-manager solution accurately automated the client’s essential functions and processes, ensuring that the right people have access to the right data at the right time and that data is retrieved and processed accurately.
All new file formats, configurations and data translations can be added and managed from the interface, which eliminates the need for recurring development.
The solution enables users to effectively and efficiently manage data from various sources, and track the progress of transactions precisely through the system. The newly created audit trail, coupled with the escalation system, has lowered the risk of any errors going unnoticed and ensures that inaccuracies can be corrected quickly.
Our system resulted in a drastic reduction of the workload, effort and administration required from the team, allowing them to focus their energies elsewhere.
JSE: The Johannesburg Stock Exchange
Assets Under Management (AUM): Measures the total market value of all the financial assets that a financial institution manages on behalf of its clients.