Portfolio Systems 2015: A Front to Back Look

Asset Management Systems in the New Age
by Jay Wolstenholme, March 19, 2015
Industry Trends
Global

Abstract

Buy side “portfolio systems” need a definition overhaul. Portfolio systems now include portfolio risk, analysis, pre-trade / post-trade, portfolio/fund accounting, and shadow accounting. Not to mention IBOR. This report outlines the critical functions of portfolio systems, the buy side clients that need them, and the universe of key suppliers.

“As the pressures of new regulations, lower margins, investment diversity, and major wealth demographic shifts all affect the buy side, the laconic days of ‘one size fits all’ no longer cut it,” says Jay Wolstenholme, a senior analyst with Celent’s Securities and Investments practice and author of the report. “The universe of portfolio systems now ranges from enterprise front-to-back platforms to targeted ‘a la carte’ compliance/risk modules. Asset owners, asset managers, and industry intermediaries all need portfolio systems, but all with their own varying degrees of complexity and functional coverage.”

From real-time risk analysis to aggregation of internal and external asset managers, anyone who is evaluating how to operationally and technically manage their portfolios needs to understand the growing universe of suppliers and the possible disruptors. Asset owners, asset managers, and market intermediaries need to know what is available in the portfolio system marketplace in order to utilize technology to their investment advantage. The goal is the right fit of technology to achieve optimal investment return objectives, being cost-efficient while minimizing operational risk. Having the right portfolio system setup is a major step along this path.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

 

A Quick Review of the Trends for Buy Side Institutions

3

 

Key Research Questions

5

Functional Operational Landscape of Asset Managers

6

 

Asset Management Operational Overview

7

 

Asset Management Front-to-Back Key Functions

8

 

Front Office

9

 

Middle and Back Office

9

 

Key Features Required in a Portfolio System

10

 

A Word on Portfolio Accounting

12

The Players and the Equipment They Need

14

 

Asset Owners

14

 

Asset Managers

15

 

Intermediaries

16

 

Portfolio System Functionality Mapped to Client Segmentation

16

The Current Portfolio Suppliers’ System Landscape

19

Leveraging Celent’s Expertise

29

 

Support for Financial Institutions

29

 

Support for Vendors

29

Related Celent Research

30

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