Many investors are increasingly seeking an alternative to basic custodial services but must successfully balance the requirements for increased value-add with cost considerations given the limited resources available.
bfinance works with sophisticated asset owners to objectively assess an exhaustive universe of dedicated investment platforms, helping clients select the most suitable platform given their individual requirements at a cost not dissimilar, and typically below their existing arrangements.
Managing institutional assets requires the implementation and coordination of over twenty core functions (including financial management, risk management, selection of providers, reporting, monitoring and IT to name a few), whilst simultaneously managing multiple third parties ranging from investment managers, global custodians, fund administrators and advisors. The proliferation of options available within an increasingly complex and evolving regulatory landscape requires an asset owner’s internal staff to coordinate the various stakeholders and effectively integrate best-in-class solutions.The traditional spectrum of solutions are often sub-optimal
Though a spectrum of traditional solutions with varying degrees of integration exist, given the internal resources available to an asset owner they can often be sub-optimal in improving the overall asset management system and present a number of considerable challenges.
> Whilst first level operational integration, comprising the establishment of a Global Custodian and Fund Administrator or a Master Fund Administrator, may be efficient in collecting data to feed into consolidated reporting, the data collected, even if “enriched”, may lack the level of analysis, accounting and reporting speed or consistency, and integration required to implement a best practice asset management solution.
> Partnerships with Asset Services Providers may provide a further level of integration, though with objectives and deliverables often undefined, relationships formed on an informal basis not only introduce a level of dependency but can fail to meet the expectations of both parties.
> At the end of the spectrum asset owners can opt for a full-Fiduciary Manager relationship which, by its nature, entails granting full operational delegation and a high degree of control to the Fiduciary Manager. This may be unsuitable for many sophisticated institutional investors wishing to retain control of key decision-making and often presents a conflict and poor alignment of interests.
Dedicated Investment Platforms
bfinance works with many of its clients and major asset management platform providers to offer an alternative and innovative solution: the outsourcing of a client-driven, customised and dedicated investment platform.What they offer
Asset managers inherently have an investment platform capability underpinned by the infrastructure, operational resources and skills maintained and necessary to implement their activities and deliver their services. When combined with their continued management of a diverse set of stakeholders and the existing channels of reporting and communication with service providers, a Platform Manager (PM) is able to house an integrated and aligned suite of services and can offer:
> Operational management of the platform itself plus coordination between all stakeholders
> Management of related services
> Asset Management, including manager selection, transition management, risk monitoring and reporting
> Financial advice
By providing a single, fully integrated architecture, a PM can allow asset owners to efficiently manage and coordinate multiple service providers through a single point of contact, all within a framework of service provision unambiguously formalised by contract.Advantages
> significant cost savings through efficiencies, fewer separate contracts with unrelated parties, as well as economies resulting from greater bargaining power of the PM with associated service providers (including asset servicers such as custodians and fund administrators)
> enhanced governance structures and accountability through the centralised flow of information
> instant and consolidated reporting, valuation and transparency across asset classes and geographies resulting in more informed and timely decision making
> speed of execution and delivery once a decision has been made
> holistic and integrated risk management and control frameworks
> access to dedicated resources and broad operational support allowing investors to draw on a breadth of resources and expert financial advice, ranging from asset liability matching services, strategic / tactical asset allocation, and heading/overlay strategies, all while retaining full fiduciary control
bfinance provides a truly customised solution, driven by a formal investor-specific RfP, to help asset owners identify and select the best-suited dedicated investment platform from amongst an exhaustive universe of options available.How bfinance has been helping clients
> Structuring a tender that reflects the client’s objectives to be achieved within the context of their individual criteria and parameters
> Operational management of the tender (including the management of RfI , RfP , Beauty Parades, due diligence, decision support and contracting assistance), supporting clients through extensive experience and due diligence expertise to help them make thoroughly informed decisions.
> Complete ongoing support during and post-implementation. Our involvement is customised and driven entirely by the needs of each individual client.