There are many of drivers that lead to this trend – the choice investments market-place has become, for lack of better words, saturated. First is elusive, and value allocations with great executives are hard to get in. On the general population side, managers with great returns are smaller in size (AUM) with smaller track records, which automatically disqualifies them from the choice process. But sure enough, when they become big enough to be regarded as, and have sufficient TR, they are really too big and already losing their capacity to generate huge alpha dog! As a result, many endowments, foundations and family offices are looking to technology to give the border. fusionex founder
Another factor fueling this trend is the quantity of data sources. A typical Expenditure Management firm subscribes to Bloomberg, Cambridge, Albourne, Prequin, Private Informant, and of course, data from custodians and other service providers. This data is not cheap, “So why not make use of it? “, is the question that is often asked. Again, technology comes to the rescue. With data science now becoming a new discipline, a chance to aggregate, infer and forecast is no longer a pipe dream.
Product sellers contribute to this pattern as well! Each supplier, be it Code Crimson, Tamale, Alladin; they are all catering for their specific segment and function – not one product was designed to cater to endowments, foundations and family office buildings! Even if we control to find one such product, the adoption rate is low and hence there is the apprehension that the product might not sustain. Because of this, many offices have purchases of one/many of the more known/accepted products. Operations and investment teams are challenging that the information stuck in these silos be freed and made open to all functions! And the only way to do this is by making technology investments.
Last but not least, technology is evolving rapidly! More target is being put on getting data in the hands of users! Organization intelligence being the circumstance in point. Similarly, end user experience tools have better drastically; thereby making the presentation of relevant information clear and concise.
Endowments, Foundations and Family Office buildings that contain been constantly make technology investments have highly benefited from doing so. They may have systems that bring in capital calls and other documents directly in to their functions work-flow and accessible from rich user cadre. Similarly, they normalize data from multiple data options in one data storage place and use that one source to drive investment analytics, functions reporting and business intelligence reporting tools. While this might seem to be like a major leap for most organizations, working with a trusted technology partner who specializes in the site helps negotiate the maturity curve faster and effectively. Last but not least, probably the most important, none of this will happen without strong acting support from the C-suite!