Investment Performance Teams Seek Freedom from Operations

As a panelist and attendee at PMAR West, I heard some consistent themes in my discussions with investment performance measurement professionals. Performance teams are looking to spend less time on operations, and have more time available for analysis and value-added activities.  With that desire in mind, allow me to highlight some capabilities to consider if you seek to optimize operational functions in your performance measurement work.

Performance teams gain bandwidth when they have tools like Sylvan’s exception-based workflow and automated data quality checks.  The investment data is cleaner, the data flows automatically, and questionable data is highlighted for review. Built-in rules for tolerances can match clients’ needs and thresholds so that when highlighted data triggers suspicion, like cash balances that don’t jive or an asset value that moves more than 10%, suspect data is highlighted and held back for review. Performance teams then have a much smaller data set to check. This focus on exceptions allows these individuals to concentrate more time on analysis. 

Performance teams also want their analysis to add value. Sylvan facilitates value-add insights by offering customizable attribution, which ensures that calculated results align with a firm’s investment process and approach. Instead of spending time figuring how the numbers match the decisions made, teams work with attribution methodologies made to match the investment process and thus explain how decisions in the process impacted performance. With Sylvan, we offer more than 20 standard methodologies, and clients can develop their own user-definable methodologies.

Conference attendees also shared a desire to spend less time getting data ready for delivery to their internal and external clients.  Through the use of Sylvan’s portal for self-service performance reporting, the amount of time preparing and distributing various reports is reduced. People want the ability to go into the system and use dashboards and drag-and-drop tools to create meaningful views themselves. With a self-service dashboard, performance teams take another step out of the operational process, expanding time and resources for analysis.

At the conference, Global Investment Performance Standards (GIPS®)—which are being revamped for 2020—was also a popular topic. Most of the firms in attendance are GIPS®-compliant and the changes won’t impact them much, but two themes surfaced:

• The segmentation of standards by product is a welcome update. (The new approach presents separate sections and tailored guidance for Firms, Asset Owners and Verifiers.) Conference attendees felt the earlier version of GIPS® was a bit opaque, with one big set of standards for different product types and practitioners.
• In addition to time-weighted rates of return, GIPS® 2020 allows for money-weighted rates of return (MWRR). This change is of interest to investors themselves, who can track their performance as well as the managers; in other words, they want performance insight including the impact of contributions.
  SS&C has offered both time- and money-weighted rates of return capabilities for years, and our Canadian clients have been reporting MWRR in conjunction with CRMII standards for a number of years.

If any of these themes from the conference resonated with you, explore Sylvan™, our market-leading performance measurement, attribution and composite management platform. Sylvan can help you streamline operations, strengthen analysis and efficiently deliver content throughout your organization. Download our "Sylvan Overview" brochure to find out more.