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Increased Complexity is Imminent Across the Investment Landscape. Is Your Tech Up to the Challenge?

A new Coalition Greenwich study reveals that answer is likely “No.”

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Shifting expectations on the part of investors, an explosion of alternative data, a transition to more permanent remote workers, demand for greater transparency and data access, and sometimes clunky legacy technology, are all contributors to a significant challenge facing asset managers and allocators globally, according to a new market survey from Coalition Greenwich.

Each of these challenges can be met with the proper technology, in particular the latest iteration of research management systems (RMS), which are highly adaptable and intuitive to use. RMS solutions offered by the most innovative companies are up to the challenges identified by the study, as II learned during a recent conversation with John Hans, Account Strategist, at Bipsync. The company’s software is purpose-built for the investment industry to manage research and compliance effectively and efficiently.

One of many things that jump off the pages of the study, is that asset owners seem to be miles ahead of asset managers in the adoption of RMS. Why do you think that’s the case?

John Hans: Part of it is the nature of the work done by asset owners when performing diligence on hundreds of different managers. They’re inundated with a ton of information – documents, quarterly letters, financial statements, capital calls, manager meeting notes, managing calendars, interactions. There’s so much information, and as a result they tend to be much more process heavy than managers, with a repeatable workflow that loops in different teams while vetting potential new managers and keeping up with existing managers. And add to that asset owners have very specific reporting mandates to fulfill.

In short, asset owners have figured the limitations of using the kitchen sink of informal consumer tools, like email, share drives, and Excel. They recognize the need for a central database where everything is stored. That said, I think asset managers are beginning to recognize that a modern RMS can help streamline data aggregation, proprietary research, normalization of information across the firm, standardized workflows, and vetting new opportunities while improving general firm-wide collaboration and enhancing compliance. In addition, when asset owners are looking at potential new managers, they are starting to ask more questions about the manager’s research process and if they are using a formal RMS. So, the issue is making its way into the manager selection process.


That’s interesting to hear, especially because the survey results reveal many asset managers think their current set up for managing research and related data is just fine – and that nearly half have never considered an RMS.

Hans: There’s an overall lack of awareness of newer research automation tools, such as a modern RMS, that have come to market in the past few years. There are legacy players that have been acquired by larger investment servicers, so at some point most asset owners and managers have probably been pitched on the idea of adopting an RMS, but it was likely a long time ago – and the technology is now light years better. Even if an asset owner or manager did acquire an RMS, the technology is old and likely hasn’t seen any additional investment to customize it for any requirements or specific needs that come down the line.

And some potential RMS users are likely just comfortable with their current process, so why change, right?

Hans: That’s a common mindset, particularly on the asset manager side. Some hedge funds, for example, think they’re doing everything perfectly without understanding the numerous efficiencies and additional benefits of a modern RMS. Beyond providing a centralized place for all your research, the technology makes an analyst’s job easier. Do you really need or want to go to 17 different applications to find the answer to one question?

There’s also a general lack of motivation to disrupt the status quo, and a belief that making a change takes a lot of time no matter when you do it. Many people in the investment world probably believe that transitioning to any software – let alone software that’s going to house all your historical research – requires a journey of six months to a year, if not more when you include customization required by your unique investment process. But that has dramatically changed. With a modern RMS, such as Bipsync, you can migrate your research into the system and begin working in the productivity environment seamlessly within a matter of weeks. It’s in any fund’s best interest to explore the modern RMS marketplace and see what has changed over the past five years or so, especially with the shifting regulatory landscape and new sources of data – such as ESG, for example – flooding the investment process. You really need a solution that allows you to think and act quickly or you’re not going to keep pace with the industry.

An interesting point that emerges from the survey is that among those asset owners and managers who currently use an RMS – even if they have issues with their current legacy system – still believe having an RMS is superior to a mix of consumer tools like Excel and email.

So having any type of RMS is better than not having one at all.

Hans: That’s what investors are saying. And by leveraging a more modern system, the speed at which you can innovate is second to none. A legacy system might provide updates and new features once or maybe twice a year. At Bipsync, we put out a new release every two weeks, so the system is always up to date, always checked for the latest bugs and software updates, and always leveraging the newest technologies. We’re consistently pushing out new features to keep up with client demand – and so our clients can keep up with their clients’ demands – and if we hadn’t built Bipsync around new technologies we wouldn’t be able to do that. When you look at the original fixed cost of a legacy RMS you’ve probably paid double by the end of the year. New SaaS providers tend to have a flat fee, and all the updates are included because of the technology leveraged.

Which in a way helps prevent a modern RMS from taking on the negative connotations associated with the term “legacy” as they evolve.

Hans: That’s right, and that’s a common question from our clients who are looking 10 years into the future. They want to know how quickly we can innovate and bring new features to market. When it comes to technology, it’s as important to prepare for the future as it is for the here and now.

According to the survey, here are some top pain points for asset owners and managers: keeping track of data and research sources, normalizing data, and cross-referencing aggregate content. These challenges are more pronounced among non-RMS users. In an industry that’s obsessed with risk management, does not using a modern RMS introduce unnecessary risk into the investment process?

Hans: Definitely, and the RMS can mitigate a lot of those risks. For example, you’re looking for a quarterly report dated from a year back – is it in your emails? On a shared drive? Maybe stored locally on someone’s desktop. With an RMS, all your data and information is located in a tagged, centralized location. It takes the guessing game out of tracking down information. Bipsync and other modern RMS have built-in compliance – audit trail history, versioning, and more risk mitigating factors within the platform itself. A modern RMS removes those top three pain points in one swoop by aggregating all data sources into one clean and configurable system that can be at the fingertips of an analyst, thereby increasing their productivity. By letting an RMS automate these processes, investment professionals can focus more on what they’re experts at - investment selection or manager selection - instead of manually digging through 15 different systems. Not optimizing your team is a risk, too.

The best way to think about a modern RMS is that it’s a centralized research repository that can be integrated with other systems in your technology stack. Whether it’s data from your portfolio management system, accounting system, a compliance system, or others - that data can be synced into the RMS to provide actionable insights in one user-friendly interface. These technologies top the checklist when you’re launching a fund. It should be a no-brainer to use an RMS that optimizes and streamlines what differentiates you from your competitors. A modern RMS allows you to centralize data from vendors and your proprietary research, normalize it so it can be easily consumed across your organization, and cross-reference all those different data sources and collaborate on them to make informed investment decisions.


A commonly cited reason for not having an RMS is lack of ROI. Can an RMS help measure its own ROI?

Hans: You can measure productivity based on the fact everything in an RMS is in one place, instead of using email and a chat system to talk about a particular note or piece of research that may have been saved in Dropbox, but then it was emailed to someone else, and now you’re getting on your chat or your phone to talk about where what version of it is. That’s a scenario where critical and expensive resources are being wasted tracking down the latest annotated version of a particular note or document. With an RMS, everyone can collaborate through one simple interface, and everything is version tracked – all notes and files live in one system, they’re all tagged appropriately, and no one needs to waste their time finding the needle in the haystack. Everything is right on the analyst’s screen at the click of a mouse or after a simple search.

How does employing an RMS help ensure you’re prepared for future ESG requirements as they evolve?

Hans: There still is no universally adopted set of standards for ESG data and reporting. Everyone is just trying to build best practices, but they need to consider how they can put those processes into play. An RMS is an obvious way to do that. We are helping a lot of our clients gather ESG-related information and incorporate it into their investment process in a repeatable way. An RMS that has a built-in version history and reporting capabilities is going to be critical for them when it comes to compliance and reporting. We’ve also seen an increase in clients asking us to help them aggregate ESG data sources, the number of which is only going to grow. With that complexity comes the need for a formalized approach.

Increased use of alternative data adds to the complexity of the overall data picture. How can a modern RMS help in that regard?

Hans: It’s a difficult process tying together all the alt data you might have to get a single view of how you use it to analyze a single issue or company. We can do all that for you on one screen. Once the data is in a system, analysts – without going anywhere else – have all the ammo they need to move their process along. Keep in mind, those alternative data points may change daily, monthly, quarterly, or annually, depending on the type of data. That’s where we’re seeing a massive difference from older systems that weren’t built with open and flexible data architecture. Our RMS can also help manage the vetting process for alternative data providers.

How much more complex is the data scenario going to become moving forward?

Hans: In the survey, 37% of the respondents across asset owners and managers say they’ve increased their alternative data acquisition over the last two years. Most other respondents cited no change, which means that they didn’t decrease the amount of alt data they buy. As you introduce additional sources of data it becomes more complex to manage all that information.

Every new data set is different from the next, from the type or structure of the file that it’s delivered in and from a context standpoint. Is it related to a company? Is it related to a specific industry? Is it ESG-related that potentially, which may require additional workflows on top of that? Everyone in the investment world is facing this, and now is probably the time to think about moving research processes onto something that can handle what’s coming down the line. We look at our RMS as the operating system for a research team – the system that they will use every day to create value for their fund or firm.

To learn more about how modern Research Management Systems power productivity for professional investors, check out the new Investment Research Insights reports for Asset Managers and Asset Owners.