In a rapidly changing global economy, it is crucial for institutional investors to implement top-tier systems and processes to maximize productivity, accuracy, and portfolio optimization. The key to success lies in the integrity and accessibility of data, making a powerful and versatile research management system (RMS) essential for informed and data-driven investment decisions.
7 Must-Haves For A Multi-Asset Class RMS –
And Why Your Organization Definitely Needs One
By Kristen Kocis, Director of Institutional Sales
The global economy and markets are in a state of flux and uncertainty, so it’s more vital than ever to implement best-in-class systems and processes that maximize your productivity, visibility, and accuracy while ensuring your portfolio is fully optimized.
The success of your business depends heavily on the integrity and accessibility of your data. That’s why a powerful, versatile, multi-asset research management system (RMS) should be the top consideration for institutional investors trying to enable their teams to make more informed and data driven investment decisions.
Before joining Backstop Solutions, I spent much of my career on the “client” side of institutional investing. I used a dozen or so RMS solutions during this time – some good, some not so good. My client-side experience has given me a detailed insight into what investment professionals really need from their RMS and the capabilities that maximize an RMS’s value to individual and organizational performance.
For your consideration, here are the top seven “must-haves” for an ideal RMS:
1. Investment research data accessible in one location
Can you answer these questions easily: “What is in my portfolio?” and “How is it performing?”.
Your firm needs to track an immense amount of quantitative data, and yet few RMS solutions effectively manage the substantial – and vital – qualitative element. They don’t capture the complete picture or the subtle, evolving minutiae that profitable investment decision-making requires.
Your RMS should allow you to upload, store, and share a comprehensive range of current and past research and due diligence that helps tell the whole, nuanced story. You want to consider individual fund and manager performance, prospecting and allocation patterns, emails, letters, research notes, meeting minutes, conversation records, and other long-form, non-quantitative documentation. Only when you have all these records in one accessible location can you say that your RMS is sufficiently robust to meet today’s institutional investor diligence and risk management needs.
2. Easy integration with your other data sources
To be a single source of truth, your RMS needs to integrate seamlessly with your internal and external data sources. Any user should be able to log in and see your data in a way that’s robust, comprehensive, and, most importantly, usable – with clear implications for the quality and efficiency of your reporting.
You want to consider an RMS that lets you incorporate a broad spectrum of complementary data.
3. A configurable, multi-asset user experience
Researching private equity differs from researching hedge funds, real estate, or fixed income. So your RMS UX must be configurable for the data needs, research processes, and preferred terminology of different users within your firm. A truly multi-asset RMS allows each team to optimize its research performance, regardless of the asset classes they’re researching, while providing your firm with a single, holistic picture for strategic decision-making.
Configurable output options are also vital. A best-in-class system allows you to extract, digest, and understand your data in multiple visual formats. That means anything from two-minute summaries you can read on your way to a meeting to in-depth, exhaustive reporting that lets you drill down “in the moment” to granular levels of detail on individual funds or managers. You need these details ready with a click.
4. Your key tasks, streamlined and automated
Strategic investing requires the time to think about each investment and how it works within the portfolio. Streamlining and reducing the administrative burden on your team is necessary to build a well-oiled investment research machine. Aside from its obvious impact on productivity, automation of data input and easy access to reporting are vital to any great user experience.
Additionally, most institutional investment firms find it increasingly challenging to recruit top talent. If you can minimize menial tasks like document sourcing and uploading, and let new analysts spend more time interpreting insights and generating career-defining investment ideas, your firm will be much more attractive to the best candidates.
5. The ability to scale and evolve
Your data and research needs change in line with your strategy and the demands of the industry, so your RMS capabilities should upgrade continuously in response. For example, how much flexibility does your team have to track and analyse new and emerging asset classes? A truly purpose-built system should offer this flexibility, especially if it’s delivered “as-a-service” by a provider that invests heavily in ongoing development.
6. A powerful impact on transparency and collaboration
As well as supporting investment activity, your RMS should seamlessly adapt to new ways of working. In the post-Covid world of hybrid working, casual day-to-day lines of communication have changed. This can affect project visibility and team cohesion. An RMS with a dynamic, unified, cloud-based interface makes monitoring who is doing what at any given time easy. Your CIO should easily be able to see the teams’ activity, which meetings are taking place, and where teams are in the diligence and decision-making cycle.
7. Security that’s second to none
Your intellectual property is sensitive and valuable. The last thing you want is for any of that to leak or be breached.
Question your prospective RMS provider rigorously about security. Insist that your solution is SOC 2 Type 2 certified. And there are other nuances to bear in mind. With some SaaS providers, your data might be lost if you terminate your contract. For genuine security, choose a supplier that will commit to transferring any data they hold for you if you decide to switch systems.
So… what next?
You might rely on spreadsheets and other dispersed resources to organize your data. Or you might adapt an off-the-shelf CRM or another system as a makeshift RMS. If this is the case, your team is spending more time managing and finding data than actually analyzing and really understanding it.
Understanding your current and future needs, and these “must-haves” for an effective RMS, will give your team the power and control to optimize performance now and in the long term.
