Waters Rankings 2014 Winners’ Circle: Multifonds

How have the past 12 months been for Multifonds?
The highlights have been huge progress on convergence, with clients using Multifonds both for traditionals and alternatives, and really breaking the silos. That’s very evident both on the accounting side as well as the transfer agency side. That, to me, is the biggest trend that we’ve seen. I’d also add that things are moving again and people are making decisions and investing. If I compare this year to 2012 when it was so quiet that you could hear a fly in the room, I think things are moving, which is very good for us and for the industry. Given the fact that most of our clients are third-party administrators, they’re winning mandates, and they’re paying attention once more to efficiencies and improvements. When you’re in a steady state, there’s no reason to invest and improve, and you ask why you’d put more money into a business that isn’t growing. But once you have the driver of new clients, it’s a big catalyst, not just in terms of onboarding those clients, but also using those funds to do other things that you wanted to.

With this growth and a resurgent industry, what are the kinds of concerns and challenges that you’re hearing from your clients?
The first thing you’re always going to hear is regulation. Which I think is fair, but my view is that regulation has always been there.

It’s not a new thing?
Right, it’s just the nature of the industry. The aviation industry has always had to deal with hurricanes and bad weather—that’s not going to change—and in the same way, I think it’s so repetitive in the financial industry. What is new is the convergence that I mentioned, and secondly, I think transparency and data are becoming topics that are no longer just the concern of the technology department. In the past, systems were black boxes, where people wanted to produce different kinds of reports to deliver downstream, and whatever happened in that black box was someone else’s concern. People didn’t care as long as they had those reports. Now, topics like data segregation in Europe, and the need for having full transparency around who your clients are, how many are investing in the fund and so on, are coupled with how the data is stored and managed, and how many steps the data is going through, getting manipulated from the engine to delivery—they’re becoming business topics. Clients do not accept that you pull the data from the accounting engine, you manipulate it through a data warehouse, then do it again through a portal, and send it through to a reporting engine. Business people would say that all of those steps are adding latency, and adding risk through errors, to the point where they can’t reconcile the report with what they have on the screen. It’s no longer a topic that’s just confined to the technology people—it’s a business issue.

What are the other areas?
Well, you always have cost. But I think that’s also one of the drivers of convergence, because when you’re now processing across asset classes and jurisdictions on fewer platforms, you’re going to save money.

And what’s on the cards for the next year?
In terms of jurisdictional coverage, we’re expanding to China and Brazil. Another thing we’re looking at is really pushing the system efficiency, getting it to be truly exception based. I liken it to the Olympics—every Olympics, there are records broken. It’s still humans doing it, still a human body, but they’re improving the capabilities of that body. In the same way we say that we’ve automated corporate-actions processing, pricing and the like, and then I ask what our straight-through processing ratio is, and it’s 85 percent. Why can’t it be 90 percent? Why not 95? Sometimes to improve just one percent is a huge effort, but that can be worth millions of dollars to big shops with large operations departments. So we’re looking at asset class and jurisdictional coverage, and also pushing the envelope on efficiency.