BNY Mellon – Milestone Group
A partnership so fruitful it ultimately led to an acquisition. BNY Mellon launched a new suite of oversight and contingent net asset value (NAV) calculation solutions in partnership with Milestone Group in another example of collaboration between established fund services provider and FinTech firm.
The new NAV offerings were designed to drive greater transparency, efficiency and risk management for asset managers and asset owners within its fund administration offering.
Included in the new features is independent NAV oversight and reporting for funds administered across multiple providers, calculated per-share value of a fund, and transparency in the event the primary account platform or provider is unavailable.
Then, this summer, BNY Mellon announced it had agreed to acquire fund management technology provider Milestone Group, following the partnership.
The deal will see the custody and fund services giant bolster its digital solutions capabilities and add OCIO [Outsourced Chief Investment Officer] services, cash allocation and fair value control solutions to the existing suite of NAV solutions.
Milestone’s investment automation platform, pControl, is widely used in the fund space with buy-side clients including Generali Investments, Jupiter Asset Management and Janus Henderson.
“Milestone is a core part of the asset servicing offering and we believe the newly combined capabilities will further set us apart from the competition,” Roman Regelman, BNY Mellon’s CEO of asset servicing and head of digital told Global Custodian in July.
“We’ve had a long-standing alliance agreement and are very familiar with the products, services and benefits our combined offering can deliver for clients. As the market has sought out more seamless outsourced operations, this acquisition will allow clients the flexibility to choose from both existing and new end-to-end solutions that address their individual safety and service needs to differentiate themselves in the marketplace.”
IQ-EQ – Allvue Systems
Two players making waves this year on the fund services and technology provision sides of the business are IQ-EQ and Allvue Systems, respectively. That they came together in a partnership made this collaboration all the more interesting.
As one element of the partnership, Allvue implemented its investment accounting solution as the technology infrastructure of IQ-EQs new debt and credit services platform.
The partnership enabled IQ-EQ to provide loan agent and private debt loan administration services for a range of asset classes including broadly syndicated loans, private debt loans and bonds, and corporate and municipal bonds.
“Historically, private debt managers have opted to administer their back-office functions in-house, but this requires heavy financial and time commitment and pulls attention away from key investment activities,” said Justin Partington, group head of funds, IQ-EQ, at the time.
“As a result, we have found that debt managers have been increasingly looking to outsource this work. When launching a new offering to meet this need, we sought out to partner with Allvue due to its unmatched industry experience and top-notch systems for debt managers, which will ensure we can deliver clients the best, holistic service.”
Allvue Systems has also become a popular option for fund administrators as they look to revamp their technology infrastructures to cater for more complex private markets fund structures.
Last year, the vendor also partnered with Trident Trust to revamp its private equity fund services platform, while Mainstream Fund Services signed up the Korea Development Bank Asia (KBDA) as its first Asia-Pacific-based private equity fund client to be administered on Allvue.
Northern Trust – Distributor Due Diligence (3D)
Like many of the top tier fund administrators, Northern Trust has a combination of build, partner and acquire when it comes to innovation. In this case the Chicago-headquartered firm decided to partner, with Distributor Due Diligence, also known as 3D.
Northern Trust partnered with Distributor Due Diligence (3D) to use its Network Monitor service to support asset managers’ fund distribution oversight. Under the new partnership, Northern Trust began providing clients with 3D’s platform service to help them discharge their regulatory responsibilities for performing due diligence of their distributor networks.
By using 3D’s platform and its distributor coverage, which spans across more than 75 countries, clients have been able to automate key aspects of distributor due diligence questionnaire processes. This is said to support asset managers’ focus on overseeing appointed intermediaries and complying with regulations.
“This solution deploys technology to help our clients reduce manual administration while evidencing the measures they have taken to meet required standards of due diligence. As regulators show heightened focus on asset managers’ control of cross-border distribution, Network Monitor helps drive efficiencies in how they can fulfil their responsibilities,” said Clive Bellows, head of global fund services, EMEA at Northern Trust.
European regulators have become increasingly focused on product governance and distributor oversight. Northern Trust’s solution is targeted at helping managers meet regulator’s expectations and provide auditable records of doing so.
State Street – Lukka
In December 2020, State Street led a $15 million Series C fundraising round into crypto asset technology and data services company Lukka, with an eye to using the start-up to further its digital asset ambitions. Over the next year, its digital asset plans were drawn up under State Street Digital, with Lukka involved in a key development for the custody giant.
The Boston-based custodian announced in June it would use middle- and back-office technology developed by Lukka to support the collection, standardisation, enrichment, reconciliation, processing and reporting functions related to crypto and other digital assets under new fund administration services for private fund manager clients.
State Street is also using the Lukka Reference Data and Lukka Prime Pricing Data solutions that will enable it to consume crypto assets that are comingled within a private fund manager client’s traditional alternative investment portfolios.
As cryptocurrencies and decentralised finance become increasingly mainstream, institutional investors have stepped up calls for traditional service providers to expand their services in order to facilitate their entry into this booming market.
“The growth in popularity of digital assets is showing no signs of a slowdown and State Street Digital is committed to continuing to build out the necessary infrastructure to further develop our digital assets servicing models to help meet our clients’ growing demands,” said Nadine Chakar, head of State Street Digital.
“Our work with Lukka, leveraging their software and data in order to help expand our digital and crypto asset fund administration capabilities to alternative managers is just another advancement in our digital solution set and marks a very exciting development.”
On Lukka’s side, the digital asset outfit has been growing at pace since its receipt of the award for Innovation in Digitised Fund Services at Global Custodian’s Industry Leaders awards in 2019. Industry heavyweights have been taking on new roles at the firm in some standout personnel additions, and Lukka now serves over 210 active crypto funds and assisted companies such as ShapeShift and other major crypto exchanges and OTC desks through financial audits.
It is also a supplier of crypto asset data to the largest traditional financial and crypto native firms including S&P Dow Jones Indices, IHS Markit, RSM, and Arca, among others, processing over $4.4 trillion unique transactions to date.