Technology Levels Buy-Side Playing Field
As the price of technology and associated tools has come down over the past decade, small and medium-sized asset managers can start competing against tier-one rivals on a more level playing field, according to Bramshill Investments CEO Stephen Selver.
Since its founding seven years ago, the alternative long-only fixed income firm has gone from using a simple moving average strategy with $150 million AUM to a firm with $2.5 billion AUM and its own 40 Act fund, two hedge funds, and a UCITS.
“We execute with more than 30 counterparties regularly, and deal with more than eight custodians,” he said during his keynote at The Summit for Asset Management in Brooklyn. “This would be impossible without the technology that we have been able to leverage.”
To grow small and medium-sized firms, they need to implement enabling technologies whether the staff buys into it or not, and they must use it every day, according to Selver.
When Bramshill implemented Bloomberg Asset and Investment Manager platform in 2016, the investment managers were not used to it at first.
“If you know as an organization that it is the right thing to do, then you have to force people to use it,” he said. “Eventually, everyone falls in line.”
Following this strategy, the asset manager has developed and deployed an institutional quality portfolio reporting environment that provides institutional clients with monthly reports showing their investment’s market value, price, quaintly, reconciliation, and other portfolio metrics.
One area in which smaller and medium-sized tech-friendly asset managers may find an advantage over marquee names like BlackRock, Fidelity, or an Oaktree Capital is in regards to electronic marketing, said Selver.
Bramshill implemented Hubspot initially as its CRM platform but has grown its use of the platform to manage its electronic marketing footprint. The system lets the asset manager track whether an investor has opened an e-mail or an attachment from the firm, visited the company’s website, or checked out the asset manager’s website, LinkedIn profile, or Twitter feed.
“If you are interacting with the same client, you can find out, and you are not wasting time,” he said. “That is the most important part. Since you do not have a lot of people, you do not want to waste their time.”
Another piece of Selver’s advice was to hire youth over experience as young people tend to embrace technology better.
The firm hired one employee right out of college who could not tell a stock from a bond on her first day.
“Two years later, she runs electronic marketing in our firm,” he said. “I would put her up against anyone in that field in our industry.”
Investors could save nearly £1bn over five years due to unbundling.
Investors want greater transparency across all asset classes and portfolios.
Buy-siders can manage margin calls, calculations, reconciliations through a single interface.
Imagineer Technology survey shows only firms in $5 B+ AUM group added much headcount this past year.
Aim is to increase information access and transparency for end user investors.