Why Alternative Asset Managers Need a TAMP

July 7, 2020 - Stephen Van de Wetering

Alternative asset managers have a lot on their plate, and a turnkey asset management platform (TAMP) would reduce workloads, drive greater efficiency, and ultimately help the bottom line.

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Alternative investment managers, like hedge funds, are primed to benefit from the likes of a turnkey platform.

In 2015, PwC expected that by 2020, most alternative managers would have made transition from a reactive approach to a more proactive, data-informed operational strategy.

In that time, firms would focus on improving data collection and management, and by 2020, most alternative investment managers will have completed this transition.

As PwC puts it, “(alternative asset managers) will have laid the necessary ‘plumbing’, and accessing data across their organizations will be as natural as turning on a tap.”

Asset Managers Still Using Old Technology

Although many firms have made improvements in technology, a sizable number still have either not made any changes, or the changes they made were not well executed.

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According to an Accenture survey, 42% of asset management operations executives surveyed believe their operations and technology are not configured to adequately execute the firm’s overall strategy.

But even when they know they should make changes, some alternative asset managers are so entrenched in their legacy technology environment that it feels hard to change.

It doesn’t have to be so hard, however.

At Empaxis, we help alternative asset managers move away from legacy systems to cloud-based environments, and we understand the nuances and complexities of data migration.

Besides, if firms can be forced to adapt as well as they have during COVID-19 (moving from an office-based setup to remote work), then alternative investment managers can surely move out of legacy.

From a technology and operations standpoint, a TAMP makes things a lot easier, which we will explore below.

Benefits of a TAMP for Alternative Asset Managers

Technology Needs Simplified

A TAMP reduces the amount of systems and maintenance needed to run an operation.

Instead of paying for internal servers and a team to maintain them, asset managers can eliminate those costs and hassle by moving to a turnkey platform.

With a TAMP, the service provider takes care of all maintenance. Because it is cloud-based, a TAMP will reflect those changes and upgrades immediately.

What’s more, turnkey platforms have “all in one” qualities. The platform provides a single place to handle tasks associated with portfolio management, reporting, and analytics. No longer do investment firms have to log in to multiple locations to get what they need.

Fewer Vendors to Worry About

Any operations manager knows it’s a lot easier dealing with fewer moving technology parts, and a TAMP reduces the number of moving pieces.

Depending on the type of TAMP and how firms wish to use it, the platform can render firm’s existing technology redundant, thus no longer needed.

By reducing the number of systems to think about, it helps cut down on costs, and it’s one less time-wasting activity on the calendar, a reminder to manage the vendors.

If you move to a TAMP, make sure you let your existing providers know well in advance your intent to switch, so that you aren’t automatically renewed for another year of contract.

View All Data In One Place

Not only does a TAMP simplify the technology requirements, it can integrate well with other systems.

While a TAMP makes it possible to ditch redundant technology, some systems have to stay.

In such case, a good TAMP integrates with those vital systems, giving investment managers a chance to view all their data in one place. Our TAMP1 platform does just that. In addition, we integrate with several banks, custodians, and other necessary systems to ensure data can be viewed accurately and in one spot.

A TAMP can help account for all types of assets and store all kinds of financial and legal documents. It is possible to view all assets like public and private equities, mutual funds, fixed income, commodities, international currency, real estate, private planes, yachts, etc. all in one place.

With fewer login credentials to remember, fewer manual data exports, and fewer manual reports created, a TAMP saves firms time and money, as well as eliminate data errors.

As PwC mentioned, asset managers should be using data to guide the strategy and decision-making at this point, and a TAMP helps lay a foundation of which to make good, data-driven decisions.

Access to Operational and Technical Expertise

Another great thing about a TAMP is asset managers not only get the technology, but they get a team of operational experts to manage the technology and ensure data and reports are done timely and accurately.

Middle- and back-office servicing is built into the TAMP model, so investment firms don’t have to worry about just how the data flows in and reports are generated. A team of experts works behind the scenes to ensure everything works according to plan.

A TAMP, especially ours, is technology with a face.

While the platform should be highly functional and easy to use, there is a human element behind it. When you have higher level questions or comments on the data and reports, there are people available to help.

Asset managers will be never left to fend for themselves on the technology front.

Improve the Client Experience

It’s not just the alternative asset managers that benefit from a TAMP; so do the clients.

A TAMP comes with a client-advisor portal, and the clients can see their holdings whenever they want, updated in real time. All they need is a connection to the Internet.

What’s more, some TAMPs are white-labeled (like ours), meaning an investment firm can apply its own logo and branding to the technology, as if the technology belongs to the firm itself. By associating itself with state of the art technology, this can only strengthen brand image in the eyes of the client.

The ability to see all their investments and performance on demand also promotes transparency, strengthening clients’ trust in the firm. Clients don’t have to wait extended periods for the firm to prepare the reports; the reports are all ready to go.

Investments in the client experience are not just nice gestures; these investments can become a competitive advantage.

According to a KPMG report, 65% of asset management firms believe that deepening their relationships with their existing client base by better serving their needs is the best way to hold their ground against the competition.

Moving to a TAMP Made Easy

Good data is everything, and having a platform that makes good data accessible is worth it. A TAMP is that very platform.

While many firms feel stuck with their legacy systems, they don’t have to feel that way when they find the right provider to help them.

The benefits of using a TAMP are many, and in an ever-competitive environment where a stronger competitor can render its rivals and their technology irrelevant and obsolete, asset managers must recognize the urgency of which to adapt.

With our TAMP1 platform, we help alternative asset management firms make those changes with ease. We are experts in operations and moving firms out of legacy environments into a modern, cloud-based setup.

It would be our pleasure to speak with you and give you a demo.

If you are interested in a demo of the TAMP1 platform,
contact us today.