This content is from: Innovation

How Asset Owners Can Overcome Frustration with Reporting

Institutions are suffering from data noise and scattershot delivery of information from asset managers, muddling up the due diligence process. A solution has emerged, however.

As an institutional asset owner, this scenario may be nauseatingly familiar: several days have passed since the end of the quarter, and you still haven’t received the quarterly follow up from all of your investment managers. In fact, you expect all of your investment managers to send you regular monthly check-in correspondence. And, every month, more often than not, the information you need arrives too late to be useful. How are you supposed to adhere to your institution’s compliance policies or review key performance portfolio indicators?

Or, here’s another scenario that you might recognize: it’s the second Tuesday of the month, and your investment team is meeting at 9:00 AM. The plan is to go over any fund changes and upcoming portfolio liquidity events in the next 30 days. However, they haven’t received the report showing the KPIs breaching expected bands in a timely fashion, and the meeting becomes an all-out scramble. Without the missing fields flagged and filled out in advance, this wastes everyone’s time.

Challenge set to increase

Research indicates that the challenge of managing data received from asset managers will become increasingly more difficult for institutional investors. In a recent global survey of CIOs, portfolio managers, and other institutional asset allocators, 62% said that over the past three years they had increased the number of asset managers with whom they partner. More managers means more data delivered in more formats – and likely more missed deadlines. To add to the data traffic jam, research conducted by Institutional Investor indicates that 55% of asset owners anticipate they will add additional managers over the next three years.

You’re not alone if you struggle to have the data you need at your fingertips when you need it. In a recent study spearheaded by Institutional Investor, investment professionals at U.S. institutions revealed the factors beyond investment performance that they consider when evaluating their existing relationships with asset managers. The top answer, cited by 52% of investors was “the quality of regular reporting and communication.” Clearly, investors spend more time than they’d prefer thinking about data clutter. This comes into sharper focus when juxtaposed with the second most important factor they consider when evaluating manager relationships: responsiveness to queries (42%), which in itself is in high demand, but not as valued as quality reporting. 

Changing the game

Information overload layered atop the exhaustive fiduciary and regulatory requirements you are held to as an asset owner can turn the due diligence process into a quagmire, and may put you at risk of missing key information – or even making interpretive errors.

With that in mind, consider this scenario: instead of assigning a human to manually comb through and download PDFs from your due diligence inbox, an intelligent software automatically extracts documents from your emails. Then, an AI-powered document classification engine reads the critical data and text, and sorts and organizes the documents by fund name. Documents are further categorized, tagged, and filed into up to 50 category types and translated into your organization’s own nomenclature.

In this scenario, there is no more misfiling and no more omitting documents due to human error. There are also no more information silos – documents are easily accessed in a central location, and everyone in your organization who needs access to the information can easily identify it and use it. Everyone in your organization is now up to speed at the same time – and, with the time saved, are freed to work on high-value initiatives.

If this sounds like a scenario and solution that can help you and your teams thrive, learn more about Backstop IntellX here.

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