US fund managers see streamlining operations as the most important issue facing them in 20004, and a unified platform as the key to real-time performance reporting. Or so suggests a survey by QED Information Systems, a provider of portfolio management and investment accounting systems for large institutional investors.
The firm conducted a survey of some of the largest fund managers in the US to identify the issues most important to their technology strategy. The overwhelming majority see unified platforms and real-time reporting as the most important tactics they can employ to eliminate inefficiencies and automating transaction processing.
The survey of mid- and C-level investment executives who manage an average of $4 billion in assets found that nearly 90% believe that it is important that their business rely on a comprehensive portfolio management system. And while a similar percentage stated that their 2003 technology budget was dedicated to simple maintenance and minor updates to their platforms, a majority intend to invest in “black box” solutions moving forward.
According to the survey, a majority of US fund managers believe that an integrated asset management application is key to their technology strategy for eliminating inefficiencies and automating transaction processing.
88 per cent of those who responded say it is very important or somewhat important that their business rely on a comprehensive portfolio management solution. However, 74 per cent of the executives said that their companies are not currently using an integrated solution. Nearly half of these companies, realizing the lost productivity and potential for data errors associated with shuttling data through multiple applications, intend to upgrade or replace their technology platform in 2004, according to the survey.
“This survey proves that despite the industry delay in moving to T+1 settlement, most portfolio management companies are requesting an integrated solution that provides a pathway to straight through processing,” says Keith Brodhead Jr., Vice President of Sales at QED Information Systems. “When customers call to get information about their assets, portfolio managers cannot ask them to wait until the end of the day for their manually-run report-they need to provide answers in real-time.”
The survey of 34 executives at some of the largest fund management firms in the US showed that 91 per cent spent the majority of their 2003 technology budgets on maintenance and incremental updates to their portfolio management platforms, as opposed to investing on strategic long-term enhancements. However, 62 per cent said that when they do upgrade their current systems, functionality will be the most important factor; the majority (59 per cent) said that portfolio management systems need to be “black box” solutions and not impact their IT departments.
“Asset managers recognize that automating the settlement process is the most effective method of reducing operational costs and minimizing risk,” says Brodhead. “Integrated portfolio management solutions that include support and customization services provide the greatest technology return on investment while allowing companies to automatically complete reconciliation.”
Founded in 1992, New Jersey-based QED Information Systems provides portfolio management and investment accounting systems to large institutional investors.