Enhancing Asset Management Efficiency with Gresham’s Control Solution: A Case Study

Introduction

In today's dynamic financial landscape, asset management firms face the daunting task of handling complex alternative investment assets efficiently. This case study examines how a global tier one asset manager achieved full control over high-volume alternative investment assets using Gresham's innovative Control Solution. By streamlining operations, automating reconciliations, and overcoming legacy limitations, the firm significantly improved its efficiency and accuracy.

Challenges Faced

1. Operations Staffing Challenges: To maintain data integrity and validate external accounting service provider accuracy, the firm established a large team to perform daily reconciliations between internal and external records. As the complexity of derivative asset volumes grew, operational staff also increased due to the constraints of existing control solutions and manual processes.
   
   
2. NAV Validation Complexity: The validation of net asset values (NAVs) for intricate financial products posed a significant challenge. Confirming third-party administrators' values for trades, P&L, prices, positions, and corporate actions became complex. Maintaining two sets of records to synchronize the shadow accounting system and custodians led to constant error risks.
   
   
3. Legacy Limitations and Inefficiencies: The firm relied on outdated processes, including spreadsheets and proprietary platforms, to support its expanding alternative investments business. This reliance on inefficient, manual procedures hindered growth, especially concerning over-the-counter (OTC) derivatives.
   
   
4. Complexity and High Volumes: As the firm dealt with increased asset volumes and sophisticated products like OTC derivatives and loans, the need for automation became evident. Compounded by complex fee schedules, an automated solution was necessary to ensure accuracy and scalability.

The Solution: Gresham's Control Solution

In response to these challenges, the firm adopted Gresham's Control Solution, a comprehensive and automated approach to managing data and reconciliation controls for its alternative investment assets. The implementation of this solution led to several notable results:

1. Elimination of Manual Effort and Legacy Limitations: By adopting Gresham's Control Solution, the firm eliminated manual efforts and addressed the limitations of its legacy technology and proprietary in-house systems.
   
   
2. Self-Sufficient, No-Code Controls: Control Solution offered a complete, rules-based configuration of controls without the need for coding or development. This empowered the firm to create complex data processes quickly and flexibly.
   
   
3. Efficient Fee and NAV Validation: Control Solution calculated and shadow-calculated custodial and depository fees, comparing them with fee data from prime brokers and custodians. The solution accommodated complicated scenarios, including N-way reconciliation, through configurable tolerances.
   
   
4. Streamlined Workflow and Exception Management: Control Solution facilitated integrated workflow and exception management, allowing administrators to track commentary during breaks remediation. Acknowledged breaks could also be hidden from subsequent instances.
   
   
5. Accelerated Control Onboarding: Gresham's Control Solution enabled faster implementation of new controls compared to traditional end-user computing tools. It supported various message types and data loading methods, eliminating the need for fixed data models.
   
   
6. Enhanced Matching for Complex Products: Through intelligent, automated file onboarding and matching, the firm reduced the time required to configure new controls for complex products. The system created matches based on shared fields, eliminating the reliance on costly ETL tools.
   
   
7. Improved Efficiency and Error Mitigation: Automated controls for complex products reduced manual effort, errors, and costs. The firm managed to mitigate false-positive breaks associated with various issues, enhancing efficiency in dealing with multiple custodians.
   
   
8. Support for High Volumes: Gresham's Control Solution supported high volumes of data, enabling near real-time results for controls. This capability eliminated the need for doubling the firm's operations staff to manage high volumes efficiently.

Conclusion

The case study highlights how a global asset management firm transformed its operations by implementing Gresham's Control Solution. By automating reconciliations, improving efficiency, and overcoming legacy limitations, the firm achieved full control over its high-volume alternative investment assets. The results underscore the critical role that innovative solutions play in navigating the complexities of modern financial markets. Through the adoption of Gresham's Control Solution, the firm was able to streamline operations, reduce costs, and position itself for continued growth in an ever-evolving industry.

Discover how Gresham's Control solutions are revolutionizing digital integrity in financial institutions globally. Contact us today to explore how these solutions can empower your firm to achieve operational excellence.