IBRC - INVESTMENT OPERATIONS CHALLENGES. A recap

Curium were happy to attend The IBRC Investment Operations Challenges conference held in Sydney on Nov 21-22. It was good to hear the views of investment operations professionals, vendors and consultants. It was quite a focussed agenda. A particular call out to Stephen Huppert who chaired and always kept the sessions moving.

As we often attend conferences such as this with a Data Management hat on, it was interesting that there are many differing views on Data Management. Everything from outsourcing everything, to "and end to end system is the only way to have a single source of truth", to flexibility and an ability to have your own in-house data management capability is vital were provided. One question that was asked was the ability for organisations to quickly respond to Russian stock exposure question. Organisations that had their own in-house capability were able to respond quickly. Our own view is that if you put all your eggs in one basket (whether that be custodian or end to end service provider), without the ability to have your own capability, then you are overly reliant on that provider, their timeframes and capabilties. This provides risk. Its difficult to differentiate yourself with an homogenous data capability. We feel that whilst there must a single source of truth, this relates to each data set. They don't all have to reside in a single behemoth data store. A tool, such as CuriumEDM, which can provide a curated single source of truth across multiple technologies and systems, alleviate the need and cost of having to persist all data in a single store. And this can relate to multiple domains, including combining member and investment exposure data, for example.

One theme, as an Operations Conference, was where does operations start and stop. A simple definition was that if it involves "execution", then it belongs in ops. So an Asset Allocation decision may belong to Investments, but the ability to rebalance and allocate cash belongs in Operations. This was one example but there were more.

ESG, not surprisingly, was a topic of conversation. With a growing number of providers and lack of standards, there are still great challenges. A similar view for Private Market and Alternate investments, where absolute flexibility is required to support these asset types and their many varied supporting data sets, which don't fit neatly with traditional data sets and systems. Systems need to adaptable to provide enterprise level capability with the flexibility of Excel.

Mergers were discussed. And particularly the challanges with mergers around both data and operations. Will the expected economies of scale really be achieved? This will be particularly challenging across Super Funds with the likes of Vanguard and their low few offering entering the market.

Operations staffing was bought into the spot light. The demands upon Investment Operations grow as does the breadth of investments. This provides both challenges and opportunities.

Please feel free to reach out to us on any Data Management topics you would like to discuss or require additional capability.