I want to begin this newsletter by thanking all of 250+ clients for making Mindmeld 2019 the largest and most attended Mindmeld to date. It was eye-opening to see so many of you engage in dynamic discussions around industry panels and product track sessions. We have a number of very exciting changes coming up this year and encourage everyone to read our recap of the event included in this quarterly newsletter.

Our vision remains focused on helping clients generate alpha through insights and the continued elimination of all types of non-investment risk through our various solutions and services. Our global team of 500+ specialists are focused on executing this mission across each of our clients’ respective operating models.

• Reducing boarding costs for our solutions via fixed-fee and fixed-scope implementations
• Ramp up investments in our “digital-first” managed services offerings, and
• Expanding our cloud rollout to make all sixteen products natively available as a SaaS offering

Long term we continue to invest in expanding our data management vision to encompass an ever expanding list of data sets (numeric and non numeric) leveraging elastic cloud/compute and cognitive capabilities via our enhancements in the EDM platform.

If you exchange data sets with different service providers, struggle with data governance, cataloging and lineage issues then come talk to us.

Finally, we are thankful and fortunate to have the ongoing trust and support of all of our clients and look forward to a long term partnership with our clients.

• Hyper Outsourcing is Here to Stay: In order to remain competitive in this ever-evolving environment, funds will have to adopt a model that can operate seamlessly with an increased number of service providers while maintaining a internal flexibility and control. Gone are the days of the single outsourcing provider model. This archaic strategy is

• no longer suited for the majority of alternative assets that are being developed and traded privately on a continuous basis. It is now common to see a typical fund leveraging 10-15 outsourcing providers across its entire value chain. Digitalization and the rise of “digital-first” service providers has leveled the cost playing field. The ability to fully leverage technology platforms with multiple specialist provides of value chain (Recon, Risk, Data as a service etc) now enables funds to achieve similar cost efficiencies that in the past were only achievable by the largest asset managers creating a sustainable long term bottom line leverage.
• Scaling Enterprise Intelligence and Analytics with a Comprehensive Data Strategy: Many funds, big and small, are finding that implementing an impactful data strategy is no small feat. As alternative data, data science and artificial intelligence grow in popularity, funds are beginning to realize they cannot achieve success with these new tools without first ensuring their core data sets are accurate. A panel of industry experts highlighted some key steps to developing a successful path:
• • Firms must first collect and secure core thought processes on data capture, governance and curation for data sets that need to be governed and curated (trades, securities, positions, PnL, counterparty, risk, performance).

• • Funds are increasingly using the curated base data sets for additional analytics, leading to definitions of a new data layer that continuously expands and evolves without tech involvement. This may be implemented as a scalable data warehouse or data lake, enabling universal access via a catalog that allows users to discover new and relevant data sets on a continuous basis without involving IT.
  • One of the most critical aspects in the path to success is getting buy-in at a business level for treating data strategically. The most successful data initiatives have full strategic buy-in, which in turn enables transparency in governance, data lineage and cataloging, making implementation and change management much easier.
• Critical Data Pathways: The volume, velocity and accuracy of data demanded by investors on a daily basis is showing no signs of slowing. Because of this, it is vital to have a process in place that allows funds to classify various asset types into a common set of attributes so that the data can be easily digested and used across the front, middle and back office. Funds can achieve this by building a flexible data layer that encompasses standard, curated and governed data sets. By pushing data governance capabilities to to the exact users most familiar with data sets, funds can avoid overloading technology teams with that work. Managers will also

• now have the ability to continuously ingest new data sets, derive analytics and report in insightful ways, all of which now form a critical core competency for asset managers. A practical path for funds dealing with any big data problems that require elastic compute and elastic storage is to leverage cloud capabilities, which provide can process the datasets in a highly scalable manner.

The asset management industry is truly at a point in its history where technology, automation and outsourcing are no longer a desire but a need. The clear winners in this equation will be those who identify key areas that can be outsourced or automated in order to provide clients with new offerings, drive alpha , reduce costs while growing their overall AUM creating a win-win offering for investors and fund managers.

As funds continue their strategic cost reduction exercises involving outsourcing middle and back-office functions, a scalable and comprehensive EDM platform is emerging as a vital data ‘backbone’ to provide accurate, consistent and timely data across client systems, processes and reporting. Every asset management firm is a complex mix of automated, semi-automated and manual processes.

Discover how one IVP client has tackled their data management complexities and challenges with Azure version of IVP EDM/Polaris which was made generally available at MindMeld this year.

• Roadmap to a scalable Cloud Data Layer using IVP EDM enabled Polaris: As funds move away from their traditional data centers and begin migration to the cloud, it is important to keep in mind that a simple “lift and shift” approach is not the answer to success. A practical case study was discussed as a case study for a large asset manager during the fireside chat at Mindmeld 2019.
  • Client manages more than $50 billion in assets and upgraded to the latest IVP EDM enabled Polaris datawrehouse to create a scalable data layer in Azure.

• • Harnessing the Azure version of IVP EDM+IVP Polaris, the fund was able to fully leverage cloud computing’s elasticity on storage and compute.
  • Detailed proof of concepts simulated on Azure DWH MPP architecure vs. traditional SQL MI with columnar architecture, it was found that below 4-5 TB of data SQL MI Columnar instances performed similarly with significant cost advantage over Azure datawarehouse MPP architecture.
  • The upgraded instance now offers users access via PowerBI and new compute intensive analytic capabilities such as doing ad hoc performance. An example XIRR calculations on 250MM rows data set could be recalculated in 3-4 seconds vs. 45 minutes in the previous older version of Polaris.

IVP EDM transforms the way data is managed, memorialized and maintained for global asset managers. It can be implemented on both a standalone basis or as part of a wider managed “Data as a services” offering, IVP EDM incorporates state-of-the-art data technology and provides an enterprise data layer that comes

with pre-built connectors to every major broker, trading counterparty and market data vendor.

IVP EDM is uniquely placed in asset management space as the ONLY solution that provides key capabilities of a Data Management, Data Governance, Data Catalog and Data Lineage platform in a single integrated domain aware solution that leverages a native cloud architecture and is infinitely scalable for both storage and compute

The asset management-specific nature of the IVP EDM solution, built upon an innovative technology stack, enables asset managers to achieve their strategic data management goals.

Optional overlay of Data as a Service creates a compelling total cost of ownership case for IVP EDM in the asset management space.

IVP OMS allows you to assess the potential impact of any trade or trading scenario on compliance, positions, cash flows and cash/credit line availability before the trade is officially executed.

• Compliance checks for hypothetical trades
• Layer hypothetical trades over portfolios to test what-if scenarios
• Run portfolio, compliance, cash flows and availability analysis on mock scenarios

IVP OMS offers insight on the intraday impact of trades and trade allocations on cash flows, cash availability and projections, which are critical for the front office's decision-making and trade allocation processes.

• Track intraday cash flows along with cash/credit line availability
• Project cash in conjunction with trade activity
• Seamless integration with Allocations engine

This platform allows a workflow-driven dialogue with the portfolio company and is equipped with tools to ensure data consistency and quality.

• Seamless interface for portfolio companies to upload quarterly/monthly/annual data sets with embedded data quality checks and controls
• Monitoring dashboard for funds to track status of data collection across portfolio companies
• Subscription-based, real-time alerts for anomalies
• Mailer Alert(s) – both scheduled and ad hoc to send reminders to companies for data snapshots

• Faster payment settlement
• End-to-end payment tracking
• Stop and recall payments

• Repeat payments based on different frequency
• Weekly/Monthly/Annually
• Specific day of every week or month

• Allows same-day settlement of wires
• Enables integration to US financial payment hub
• Ability to do batch ACH

• N-tier workflow support
• Rule-based attribute definitions and validations

• Send orders quickly through SWIFT 3 series

• Faster payment with end-to-end STP
• Improved regulatory compliance
• Enhanced party identifications

• Define overdraft threshold and limit by custodian
• Track overdraft fee and interest
• Setup alerts and approval workflow

• Ensure SSI data correctness
• Increased payment reliability
• Reduced callbacks

• Security transfers across major asset classes
• Transfer confirmation and matching
• Counterparty communication

• Supports N-level hierarchies
• Configure fund structure via UI
• Quick setup and implementation

• Support for N-level workflows
• Ability to map multiple dimensions (vendors, expense types, T&E, etc.)
• Rule-based validation and filtering framework

• Pre-defined allocation template setup
• Allocate expenses to multiple entities such as deals, funds and more via templates

• Map reference entities
• Allocation hierarchy
• Allocation methods

• Email solicitation and dispute resolution functionality
• Ability to report adjusted call amount numbers to counterparty
• New on-the-go report generation functionality
• Bolstered reporting module with the introduction of analytical reports (i.e. counterparty limit monitoring, price comparison, etc.)
• On demand data downloads from internal and external sources with the click of a button

IVP Recon’s Suggestion Engine harnesses AI and ML to power its setups and suggestion engine to address these challenges.

• Setup reconciliations in minutes with auto-suggested mappings, keys and attributes

• Quickly adapt to changes or configure new asset classes
• Go live faster with lower maintenance costs
• Recognize patterns on past user actions and predict probable actions on breaks
• Automatically identify similar breaks to speed up break resolution

Month-end closing is becoming more and more time critical. The operational checklist is becoming complex with the need for robust auditing. Huge transactional volume at the end of the month or quarter compounds complexity and delays. Recon offers a seamless solution for month-end hassles.

• Spin-off and work on "as of month-end" reconciliations in parallel with "as of daily" runs to avoid duplicate user actions
• View and reconcile multiple month-end reconciliations simultaneously
• Optimize month-end workflows with multilevel approvals and robust auditing

Fast and flexible management of data with a workflow to perform backdated changes.

• Backdated changes or prices
• Direct ingestion and upload of broker and vendor quotes
• Real-time updates and alerts
• Custom views and sharing
• Workflow actions, pricing overrides, exceptions management and posting

Test the sanctity of marks against the latest trades as well as capture detailed insights and time series on prices sourced from various providers.

• Backtesting for calculations
• Analytics with time-series comparisons
• Scenario analysis and reporting

Manage multiple snapshots of prices and the lack of bitemporality to improve the overall transparency of pricing calculations.

• Complete pricing lineage
• UI and email-based prompts for actions and pricing status
• End-to-end audit for actions, exceptions, rules and workflows

• Price securities based on a reference/proxy security

• Create and calculate the prices of custom indexes/portfolios
• Specify security weights for reference securities based on market value, quantity or any custom number
• Plug-in inputs like trading multiplier, FX rates and more to the derived pricing

Automatically project future accruals and avoid maintaining multiple Excel spreadsheets for future projections with our performance tool and enhanced graphical analytics.

• Process and curate cash flows at security level along with probability-based modeling
• Track cash flow projections across various dates
• Support dynamic IRR(s) and Modified Dietz
• Triangulation among underwritten IRR(s), actual(s) and projected IRR(s)

IVP Excel add-in allows you to integrate real-time vendor data, security and reference data as well as position and funds data to create dynamic reports within MS Excel, giving you full self-service with added control and audit of a DWH.

• Pull data through add-ins, third-party vendors like Bloomberg and FactSet, or add custom metrics manually through the unhindered, traditional self-service of Excel
• Auto-sync changes such as the addition or update of rows, columns, metrics or formulas directly on the sheet
• Support for dynamic data modeling with added functionality of bookmarking specific versions
• Leverage auto-load and sync functionality for full audit and time-series views on any file/sheet/cell
• Share all templates, changes and data across multiple users with a single click via Office 365 support

SFTR reporting has enhanced workflows to cater to all requirements of daily reporting. It has a detailed level of validations and exception management with user workflow mechanisms that support user exception tracking. Division of

data sets into logical, smaller and more manageable chunks to easily identify gaps and errors.

• Daily transaction reporting with full coverage
• Seamless data ingestion via API and FIX to drop copies with no need for manual intervention
• Robust workflows for error identification, auto-correction, validation and verification
• Reference data management for integrating data from regulators
• User-specific views are customized so that users are only privy to their assigned trades
• Exception management dashboard allows users to see, update and track error status for reassignment

IVP’s CAT offering covers a well-defined workflow for your daily reporting needs. The exception management paradigm is exhaustive and tracks errors at the user level to comply with stringent timelines. With a robust workflow that automates error identification, error tracking and trades submission, the system ultimately reduces non-investment risk.

Benefits:

• Automated end-to-end reporting with managed services at top

• Automated data sourcing via API and FIX with submission and status updates to achieve zero manual intervention
• User-specific views are customized so that users are only privy to their assigned trades
• Exception Management board for reassigning and to see, update and track error status
• Workflow already tested on MiFID for error identification, correction and submission process

IVP offers a solution for global disclosures, encompassing the likes of short selling, transparency and disclosures, and Takeover Panels. The application has resolved the basic need for constant monitoring of positional threshold breaches and has integrated the communication piece to various jurisdictions.

Benefits:

• Eliminates the need for constant monitoring of threshold breaches
• Automatic calculation of compliance and threshold breaches
• Automatic form creation for SSR, 3/4/5, TR-1, etc.
• Seamless integration with regulators for 40+ jurisdictions
• Direct regulator communication via FIX and email
• User-specific assignments and permissioning to manage

Power BI Support: Ability to create analytical dashboards using Power BI in order to embed and share them with the team.

• Stratus integrates analytics over Power BI, which allows users to create and publish content using the solution’s capabilities
• Created content is accessible through PowerBI.com or the Stratus application in embedded mode
• With Power BI, users can:
  • Create custom visuals
  • Apply custom DAX calculations
  • Do a Power BI Q&A

• EDM on Microsoft Azure released
• Serverless architecture
• Auto-scaling compute power
• Cost optimization using dynamic resource utilization
• Near real-time refresh frequency
• Ability to run complex analytical queries

• Catalog 2.0 provides a single source for data discovery and consumption
• Analytics library provides standard calculations (XIRR, TWRR, etc.) for enterprise-wide consumption
• Built-in backward and forward multilevel data lineage to build trust in data by ensuring correctness and uniformity

• Data catalog Excel add-in to directly consume the data of various data sets and calculations

• Flexible, user-defined workflow that supports mesh flows to accommodate the most complex data governance rules
• User-specific alerts and task queues to prevent slippage of exceptions
• Subscription and email alerts for monitoring and tracking
• 360-degree exceptions view for every task run with data

• Ability to reflect security data changes in Polaris DWH in near real-time with optimized performance to support large data volumes

• Integration with Markit WSO to pull loan data

• Improved workflow capabilities to define approvals at various data grains including security/entity type as well as attributes

• Get full transparency on your security/entity data with the ability to visualize end-to-end lineage of all security/entity types and attributes

• Improved layout management
• Improved leg data validations

Increasingly making headlines, some of the largest asset management firms have announced initiatives to cut operational headcount, consolidate middle and back-office services or acquire additional product or specialty offerings through M&A. Transformation may take many forms, but ultimately success will come through the strategic amplification of automation and outsourcing or the right combination of both. Here are a few examples of how the industry continues to shift.

• The Digital-First Outsourcing Provider is Here to Stay: As M&A activity in the asset management industry continues to intensify with a record of 253 deals documented in 2018, the appeal of outsourcing has become more and more prevalent.1 With digital-first managed services, functions that once involved a team of three to four people, and associated demand internally, can now be executed with more accuracy and at a lower cost.
  To learn how IVP's "digital-first" managed services can improve control and reduce cost, click here
• Direct Lending Tech Takeover: Although players in the private equity industry have begun to look at technology with a more critical eye, direct lending has the potential to dominate this

• area in the years to come. In fact, a study recently conducted by Preqin states that capital raised for private debt strategies reached $110 billion last year, following a record $129 billion the previous year. Of this money, 41 percent has been secured to direct lending funds, ultimately causing the need for traditional technology firms to take on a direct lending view.2 Due to the fact that direct lending shops are customizing each view after the borrower, funds will need a platform that can do this type of complexity on a routine basis in order to keep up with demand.
  Learn More about how IVP's credit solution can help funds manage complexity with a modular, end-to-end platform
• Research Automation Drives Innovation and Next-Generation Insights: As fee erosion continues and the popularity of long-only strategies climbs higher, it is imperative for alternative fund managers to seek new sources of alpha. Strained budgets and the continued search for alpha has recently pushed many to scale down costly research expenses, making this vital component increasingly difficult when left in a traditional manual process. According to Frost Consulting, global investment banks slashed their equity research budgets from a peak of $8.2 billion in 2008

• to $3.4 billion in 2017.3 While cost reduction has become the new reality for funds, managers cannot give up on research altogether due to the edge it provides in the continued fight for performance and AUM. Conventional research management framework tools force analysts to use pre-packaged workflows with little to no flexibility or customization, creating labor-intensive work that requires a large headcount or analyst team. The combination of these factors makes it difficult for analysts and researchers to drive innovation, pursue quantitative strategies and maximize output. As funds increase their use of alternative data and quantitative approaches, alongside a shrinking research budget, many are turning to automated research frameworks to power their bespoke research processes. By integrating quantitative and qualitative data and analytics, an automated research management framework can centralize research

• functions across the firm, creating a single repository that analysts and researchers can seamlessly access and harness. Through innovation, funds can implement bespoke research at a lower total cost with the implementation of an automated platform.
  Click here to learn more information on how IVP can help create proprietary research management platforms

^1. Robbin Wigglesworth, "One in three asset management firms could disappear, says Invesco chief," March 13, 2019.

^2. Hannah George & Kelsey Butler, "Who Needs a Bank? Why Direct Lending Is Surging," March 6, 2019.

^3. Trevor Hunnicutt, “U.S. asset managers shake up equity research as banks cut back,” February 5, 2018.

Indus Valley Partners subject matter experts are featured in several notable publications discussing key trends impacting the industry:

Mindmeld 2019: Buy Side Reaches Turning Point
Leaders in the Buy-Side Join to Discuss the Industry’s Most Critical Trends
Mindmeld, Indus Valley Partners’ annual buy-side conference held on April 11th, joined together some of the most notable CFOs, CTOs, CROs and CIOs across the alternative and traditional asset management industry for an opportunity to learn and discuss crucial trends related to finance, operations, technology and compliance.
Read more

Payal Jain Wins ‘Rising Star (Vendor)’ Award
Waters Technology Names Indus Valley Partners’ Payal Jain ‘Rising Star’ at 2019 Women in Technology and Data Awards
Read full article