The Challenge

The definition of asset management is different for each alternative asset manager. To this distressed debt and special opportunities fund, asset management meant the detailed asset by asset care and maintenance through each assets lifecycle. Because of this incredibly detailed approach, the client faced special challenges in terms of a system that could support such a detailed level of analysis. What truly set our client apart was their method of analyzing each asset class in its own unique way. Ultimately, we termed this approach hedge fund DNA, meaning that each fund has its own unique blend of assets and investments as well as an approach to caring for those assets.

When our client came to us they were a very fast growing fund and their current systems could no longer support their growth in assets, or the number staff that were being hired to manage those assets. They were working in an excel environment that could not scale, and which whose limited capabilities was constraining the business, and therefore was not acceptable.

The client wanted a system that would allow their staff to focus on their jobs making the underlying technology transparent to the users. They requested a system that leveraged common templates for cash flow analysis and forecasting, while allowing for unique analysis on various asset classes. In addition, the system needed to be able to produce consolidated cross portfolio reporting on a set of key fund prescribed metrics.

The Solution

FinServ brought in a team of seasoned professionals having an extensive background in distressed debt, systems architecture, and development. Leveraging FinServ’s Systems Development methodology, the team designed and implemented a data model that would facilitate the automated feed of data from the client’s portfolio management system, Wall Street Office. In addition, this data model supported the ability to leverage common data across the various asset classes, while also supporting the unique data that was critical to their value added analysis in some very unique investments.

Acknowledging that the client had a limited number of technical resources, FinServ elected to leverage an open corporate performance management system to custom develop the asset management system. By leveraging the similarities in the client’s asset management process, and the calculation engine already in this core product, FinServ built a flexible and robust cash projection model for each of the client’s asset classes.

FinServ leveraged off the reporting engine in the CPM tool to develop a set of automated, monthly reports which consolidated all the client’s key metrics, cash projections, covenant tests, and qualitative analytics into two data filled and visually impactful pages. The system automatically generated these sheets into various reports that could be grouped by asset manager, portfolio, or asset class. In addition, FinServ worked with the fund executives to design and implement a risk management system that could assess the funds exposures across the portfolio for counterparty, market, interest rate, commodity as well as many other risk measures.

The Result

The monthly asset management reports that once took up to two weeks to produce were now completed in one day. FinServ was able to create a user friendly and robust system that supported both the qualitative and quantitative aspects of the client’s asset management approach in the fraction of the time a system from scratch would have taken to build.

The client was able to double the number of assets managed by their staff with only minor increases to the number of staff members on the team. In addition the FinServ team created a robust set of policies and procedures and users manual that facilitated the ability for the new team members to come up to speed and ensure a consistent level of quality in the asset management processes.