A 40-Hour Ad Hoc Performance Request, Empaxis Did It 10x Faster

Investment managers face challenges that can arise at any moment, and sometimes they need our immediate assistance on short notice.

With limited time available, the Empaxis team must be extremely resourceful and efficient.

As VP of Operations, it is my responsibility to oversee the successful delivery of middle- and back-office services for our clients, and I would like to share an instance that not only highlights the best of our performance reporting capabilities, but also a very proud moment in my 15+ years at Empaxis.

The Situation

A New York-based investment management client called us late in the afternoon at the end of their workday, requesting our team to update composite performance (both net and gross calculations) by early their next morning.

It was an urgent request. They were meeting with their own clients the next day, and they need to fix a big mistake fast.

Our client realized that, for the last 2 years, the performance and management fees were incorrect. They unintentionally applied the wrong percentages, resulting in inaccurate net and gross performance, as well as charging their clients the wrong amounts.

Our client needed to show that the performance issues had been resolved, and Empaxis would make it happen.

How Empaxis Helped

Assessing the Situation

It was an ad hoc request, and a big one.

That is why we asked our automation development team to assess the scope and magnitude of the situation:

  • 2 years (24 months) of transactions for 122 portfolios
  • 122 portfolios that require monthly AUM reports over 24 months = 2,928 month-end AUM reports
  • 2,928 entries for management fees and 1,640 entries for performance fees in total for the 122 portfolios

Our team needed to download all 2,928 month-end AUM reports, then re-calculate the performance and management fees, as well as the net and gross calculations.

Once the fees and calculations have been done, they would be re-posted to the portfolios, then remove the old transactions.

A Time-Consuming Process

Manually, it would take 40 hours!

Our automation development team determined that if we were to manually download 2,928 month-end reports, it would take a total of 20 hours.

Manually re-calculating the fees (4,568 in total) for 122 portfolios over 24 months, re-calculating the net and get performance, re-posting the transactions into the portfolios, and then removing the old ones from the portfolio accounting system is another 20 hours.

A 40-hour process to be completed in less than 12 hours, it would be impossible to meet our client's needs.

But as we say at Empaxis, "There's always a better way."

An Automated Performance Solution Developed

With so much to do in so little time, the only way to meet the deadlines is by building an automation solution.

So, our automation development team determined all the steps in the workflows, which were a series of manual and repeatable steps.

The development team programmed automated bots to download all 2,928 month-end reports. Manually, it was a 20-hour process, but when automated, it took only one hour!

Now, with the correct fee percentages given to us from the client, the developers programmed the bots to re-calculate the net and gross performance. The bots also re-calculated the performance and management fees.

Once these numbers have been re-calculated, the bots appended all transactions to the trade blotter and then posted to the portfolios in bulk. For the old transactions in the portfolios, the bots removed those by adding to them to the blotter and deleting them in bulk. All these manually would have taken 20 hours, but with automation, these processes took only three hours!

In total, a 40-hour manual process got done in 4 hours with automation.

The management and performance fees were now accurate, as were the net and gross calculations.

With time to spare, we notified the client that the portfolios were ready.

A Satisfied Client

To receive a last-minute request to complete in a short time, as VP of Operations at Empaxis I am very proud of our team for making it happen.

Recognizing the fast turnaround time, our client was incredibly pleased.

They knew it was a big ask, but they also know our capabilities. One way or another, they knew we'd get it done.

The client was in a tough situation because the performance numbers and fees were incorrect over the last 2 years. They were to meet with their own clients the next day, and they needed to have all numbers fixed ahead of their meetings.

So to hear the client's genuine and heartfelt appreciation, as well as their sense of great relief, it was extremely rewarding. These are the moments when I love my job most.

A Proven Partner & Solutions Built for the Future

There will always be ad hoc requests, and investment firms often rely on their middle- and back-office service providers for a solution.

When firms consider partnering with MBO solutions providers, it's good to know how the vendor operates under pressure. That is when you see their true colors.

With nearly two decades of experience, Empaxis has proven itself a reliable partner in the middle and back office, especially in the most challenging of situations.

And other investment firms can benefit from the same automated solutions we built to calculate net and gross performance, as well as performance and management fees.

Interested more in automation? See up to 20 workflows investment managers can automate in our Automation Guide.

Ultimately, because we truly believe there is always a better way, our investment management clients are the real winners.

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