SimCorp, the Danish provider of investment administration software, has adapted to a time of heightened counterparty awareness and lowered IT budgets by emphasising the ability of its flagship Dimension product to act as an enterprise-wide risk management tool.Schroder Investment Management UK recently finished installing Dimension as a ‘portfolio book of records’ across all of its asset classes, and Simcorp is claiming some credit for Schroders’ subsequent upgrading by ratings agency Fitch, which mentioned the managers’ newfound ability to conduct “daily surveillance of counterparty risks” in its upbeat assessment.
Dimension acts as a “backbone” and “single source of truth” which is able to integrate with applications from the order management system through to the accounting platform, whether those components are provided by SimCorp or not, says the vendor’s Australian head of sales and marketing, Nick Quin.
It provides a centralised database which Quin claims can provide a chief investment officer an intraday snapshot
of their firm’s exposures, based on which investment decisions can be made. “We had a European client that last year was able to determine all of its Lehman Brothers exposures in one hour,” Quin says.
Under a model where various applications such as the order management system and the performance analytics system, each with their own database, feed into a custodian, the subsequent processing from multiple ‘sources of truth’ would mean the same information may take days or even weeks to be received, Quin says.
Schroder does not use SimCorp for all of its applications, for instance the manager uses a different frontoffice system and a non-Simcorp performance measurement system, however they are all integrated with and fed by Dimension
as ‘portfolio book of records’.
Quin acknowledged that SimCorp may have had an image in the Australian
market as an ‘all-or-nothing’ provider which required a migration of all software components – not a good image to have in a market with severely reduced funds manager revenues and IT budgets.
Indeed, global investment management consultancy Investit recently completed its 2008 IT Value Survey, quizzing operations executives from 80 of the world’s largest funds managers on their IT budgets for last year and projections for 2009. The survey found the operations chiefs were only able to spend 90.7 per cent of the budgets they had been originally granted for the previous year, and expected spending to contract further this year – including an average IT headcount reduction of 5.1 per cent (including permanent staff and contractors).