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How Cognivo Centralized Data for a Leading Investment Manager – Providing a Single Source of Truth

The Client

A U.S. based asseet manager with over $900 million in Assets Under Management (AUM).

New York, NY

The Challenge

The investment manager grew from 350 million in AUM to over $900 million in AUM over a three-year period. The growth came primarily from an increase in the number of investors as well as the investment manager adding more asset classes to their investment strategy.

The investment manager was heavily reliant on Microsoft Excel to store huge amounts of data – from the front office, third parties, and internal systems. The data included data sets related to portfolio, trades, cash, counterparties, collateral, accounting, and investor performance data. This data was then being used for analysis, summarization, as well as reporting purposes. Due to the fast-paced nature of the industry, the firm kept making incremental updates to the current system over the three-year period.

The investment manager’s data architecture and infrastructure were not keeping pace with the dynamic changes and the growth of the fund. The operations department was spending a large amount of their time in cleaning, aggregating, and preparing data from multiple workbooks and other CSV files, that could then be used to run VB macros to do analysis and generate reports. In some instances, the macro was failing without warning or just hanging for long periods of time.

The Solution

The CIO and the COO at the investment management firm explained the scenario in detail to the Cognivo team over multiple discovery calls and on-site meetings with operations and management. The Cognivo team decided to take a twofold approach to the challenge at hand.

The first step was to understand the architecture requirements looking 3-5 years into the future based on the growth prospects of the investment manager, as well as high-level insights into the trading strategies that might be utilized.

To immediately alleviate the major pain points, Cognivo decided to refactor the current system and implement incremental updates to keep the system viable for the next 3-6 months.

During this period, Cognivo re-engineered the current data requirements, data dictionaries, application architecture, and other core requirements that supported multiple asset classes and currencies.

With extensive knowledge and expertise in the investment management industry, the Cognivo team was able to aggregate and centralize the firm’s internal data from the portfolio and accounting systems into a central data warehouse.

We then installed custom real-time business intelligence dashboards for the front office and back office teams to be able to view critical data at any time.

New York, NY

The Result

The new data warehouse and system designed met the client’s goals, as described in the Challenge. Cognivo’s extensive knowledge and experience in the investment management industry allowed for understanding of the current systems without any major documentation. The legacy applications and services were successfully re-engineered in a relatively short period of time.

Prior understanding of various types of hedging strategies and knowledge of numerous asset classes allowed the Cognivo team to start small and perform rigorous testing and validation of the new reports against independently built Excel spreadsheets, as well as current reports being used in production.

Cognivo provided constant updates to the COO on a weekly basis, as well as when needed. The project was successfully completed in less time than initially anticipated, and under budget. As a result of the upgrade was successfully completed sooner than expected and under the initial budget estimate. The investment manager has decided to retain Cognivo to manage their internal data on an ongoing basis. We have also made several feature enhancements to the new system, over time, based on employee feedback.

Major Benefits

Fully automated, efficient, reporting & analytics. The automated aggregation and centralization of critical operations data, allowed the entire reporting process and the reports to be more predictable and reliable. The daily reports and older archives became available through a centralized dashboard to the management team without having to manually search for them or ask the operations team when needed. The biggest achievement however was the accuracy of the reports being generated, which improved by over 90 percent. In addition, Cognivo added various automated error (reconciliation) checks on the input data as well as the generated reports.

Highly Efficient Workload Management. The investment management and the operations team no longer need to gather data manually from various sources, and then reconcile the data after generating the reports. According to the Chief Operating Officer, the biggest advantage of this new solution is that this allowed them to better utilize their small team of analysts, who were able use their time performing more meaningful tasks for the fund

Exceptional Return on Investment. According to the Chief Operating Officer, the man hours saved by automation allowed at least one full time role to be dedicated to other functions within the company. A full-time role saved them anywhere from $75,000 – $90,000 per year. This amounts to around $900,000 in savings over a ten-year period.