Buy-Side Performance Teams Hobbled by Manual Processes, Scalability Limits

Bénédicte Godet

Author: James Rundle

Publication: WatersTechnology

A generally high level of reliance on manual processes is storing up problems for performance teams in the asset management industry, according to a survey from vendor BISAM. Meanwhile, the scalability of existing systems is becoming an acute issue.

In the survey, conducted by PK Consulting in November 2014 and reviewed by Buy-Side Technology ahead of its release in the next few days, 55 firms answered a series of performance-specific questions.

The results show that in areas such as the loading and validation of source data, issue identification and resolution, and the distribution of performance results to both internal and external clients, there is a distinct lack of automation.

“Where manual processing exists is in the provision of source data. When it comes to collecting that, and distributing the results they produce, that’s where they’re still reliant on manual processing,” says Peter Ellis, founder at PK Consulting. “I think, to an extent, there’s been a level of departmental insularity, where attention has been focused internally. That’s left them in a situation where they’re not well integrated with the upstream processes, and they operate in a disconnected way from the systems and people that are providing them with data, and from the people who need the results they produce.”

Deep Dive

The survey is the latest push by BISAM into assessing the state of the performance function within the asset management industry, and follows on from a whitepaper the firm released regarding standardization of performance efforts in 2014.

Many teams follow highly individualized mechanisms of performance reporting, but the firm’s CEO, William Haney, says that this is one of the first times such a deep dive has been taken into the processes used across the industry.

“I am unaware of any targeted survey of performance practices being carried out on this scale before now,” Haney says. “For too long we have been reliant on individual opinions about what performance teams should do and how they should do it. What we have now is a substantial database of practitioner-fed facts about market practices that can be used by asset management organisations to assess performance functions against independent peer group benchmarks. The key aspect of this is that it is not BISAM saying this is what performance teams should be doing; rather it is the performance industry itself saying that this is what we are doing and should do.”

On the systems and technology side, BISAM’s survey also identified growing concerns that the scalability of systems used to support performance is rapidly becoming an issue.

Respondents broadly said that they had concerns over whether the current systems in place would be able to support the growing volumes of information and data beyond three years from now.


However, investment in those systems did not appear to be a tremendous issue. Asked to rank different challenges on a sliding scale of least to most severe, a surprising result was that participants appeared to be less concerned with said investment, despite an anecdotal trend toward compliance and regulatory projects consuming large swathes of the budget at investment firms.

Likewise, more time seemed to be spent addressing demands of internal clients for performance results as opposed to external ones, and that more effort was spent on scheduled reporting rather than reporting ad hoc, perhaps highlighting a disconnect between various stakeholders inside a business.

“One of the key questions that was left in my mind after reviewing the findings is this: Do asset management firms ─ especially the front-office portfolio managers, the client service teams, the C-suite ─ share the same view of the world as their performance teams who generally said they were doing a good job currently?” asks Haney. “Is their alignment in the timeliness, quality and scope of delivering performance analytics across the firm and if not, what are the biggest gaps to close?”

The results of the survey will be released in the coming days by BISAM.

See the full article on WatersTechnology here.

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