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SimCorp Dimension for the asset management industry

www.simcorp.com MITIGATE RISK

REDUCE COST

ENABLE GROWTH


Table of contents

Table of contents Mitigate risk, reduce cost and enable growth in the asset management industry

Pages 6-7

4

SimCorp Dimension: a modular and scalable solution for asset managers

4

Meeting asset management industry challenges with SimCorp Dimension

6

faced by asset managers.

Mitigate risk with SimCorp Dimension

8

Pages 24-25

Mitigate risks in the investment process

8

Reliable market risk assessment

8

Learn how SimCorp Dimension meets the challenges

Manage operational risk

10

Mitigate risk with straight-through-processing

10

Mitigate counterparty risk

12

Reduce cost with SimCorp Dimension

14

Cost reduction throughout the organisation

14

Crucial focus on operational costs

14

Learn about the automated workflow for daily asset

Reduce labour costs with SimCorp Dimension

16

management processes provided by SimCorp Dimension.

Enable growth with SimCorp Dimension

18

Pages 26-27

Create value through scalability, cost reduction and product innovation

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Value creation through innovation

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Scalability: a key ingredient to growth

21

Growth through low-cost leadership

22

SimCorp Dimension for the asset management industry

24

SimCorp: global investment management software developer of the future

Learn about SimCorp: a solid business partner committed to continuously delivering cutting-edge technology and

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know-how for the asset management industry.

Pages 28-29

Thought leadership in investment management: SimCorp StrategyLab

28

Contact information

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Learn about SimCorp StrategyLab’s research concerning the global asset management industry.

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Mitigate risk, reduce cost and enable growth in the asset management industry

Mitigate risk, reduce cost a in the asset managemen The asset management industry is experiencing a period of unparalleled change, driven by, among other things, a need for more transparency and better reporting, an increasing list of new client demands, more rigorous regulatory controls and fundamental changes to the financial markets.

SimCorp Dimension: a modular and scalable solution for asset managers

flexibility, scalability, functionality, usability, performance

Asset managers must continuously reconcile meeting the

modular solution, helping asset managers to mitigate

challenges imposed by clients, regulators and the market

operational risk and reduce costs.

and reliability in a highly configurable and fully integrated

with the containment of operational costs and fostering an environment for growth. As a result, many asset man-

As one of the benefits of these system-wide features,

agers seek to utilise their IT investments in a more strate-

SimCorp Dimension’s high degree of scalability ensures

gic manner, with the intent to achieve superior scalability

support for a virtually limitless number of new products,

and agility for their businesses.

portfolios and client mandates, incorporating a complete range of financial instruments while minimising incremental

SimCorp Dimension is a comprehensive investment man-

costs. As a result, SimCorp Dimension allows asset man-

agement system offering asset managers unprecedented

agers to focus on their core competency, namely provid-


Mitigate risk, reduce cost and enable growth in the asset management industry

and enable growth ent industry  By implementing SimCorp Dimension as the core asset management system for its London branch, DIAM International has: • increased transaction volumes by 50% with no increase in operational staffing levels; • reduced risk in the business by moving to a single system, thus avoiding disparate data sources; • eliminated the cost of maintaining several systems and the need to integrate diverse systems with one another; • implemented an asset management platform that supports the current business and is flexible enough to adapt as business and market require- ments dictate. For more details on how DIAM International and other companies have benefited from SimCorp Dimension, please visit www.simcorp.com/cases.

Want to learn more? Learn how SimCorp Dimension seamlessly ties all asset management operations into one flexible, ing alpha for their clients through automation of processes

transparent and efficient

that were previously handled on a manual basis. In addition,

workflow.

the high degree of automation, coupled with a single database that facilitates the transparency demanded by clients,

Download ‘The

positions asset managers for growth through strategies

enterprise solution

such as product innovation, low-cost leadership, geographic

for the investment

expansion, and mergers and acquisitions. In summary,

management industry’

SimCorp Dimension is designed to meet the needs of

brochure at

asset managers and provide the infrastructure to support

www.simcorp.com/

their strategic growth objectives.

brochures.

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Meeting asset management industry challenges with SimCorp Dimension

Meeting asset managem challenges with SimCorp The challenges facing the asset management industry today compel its players to seek out and leverage new tools to support their business strategies. At the executive level, it has been acknowledged that IT infrastructure must be utilised in a strategic and sustainable manner. SimCorp Dimension fully meets current and future system requirements seen in the light of these market trends. SimCorp Dimension offers solutions that are tailor-made to meet the challenges faced by the asset management industry. Discover how SimCorp Dimension helps asset managers:

Reduce costs through automation • Automated processes reduce costs related to manual errors. • Labour costs related to maintaining multiple, disparate databases and systems are eliminated.

Mitigate risk • Position data is available across all asset classes, and the same risk models can be applied to all data using the same market data and risk factors.

Enable growth through scalability and flexibility • New products and higher transaction volumes can be accommodated without a corresponding increase in costs. • Open architecture facilitates integration with any number of external data sources. • Increasingly diverse reporting requirements are easily met.

Provide transparency throughout the investment process • Transparency is maintained throughout processes concerned with counterparty exposures, fees and commissions, end-of-period calculations or valuations and the structure of investment portfolios. • An STP process for investments ensures a transparent and comprehensive workflow.


Meeting asset management industry challenges with SimCorp Dimension

ment industry Dimension

Adapt more easily to new regulations • A clearly segregated tax regulation structure means that new tax regulations or changes can easily be accommodated. • Up to ten accounting methods can be deployed per portfolio. • Reporting solutions are provided to meet any reporting requirements.

Scale the business without additional headcount • Integrated investment processing leverages product and portfolio structures throughout the enterprise, ensuring data validity and consis- tency and eliminating manual processes.

Add new products or financial instruments with ease • SimCorp’s XpressInstruments tool facilitates the addition of new instrument types quickly and efficiently.

Minimise the impact of mergers and acquisitions • Extensive enterprise-wide functionality and connectivity tools eliminate the many risks associated with IT integration or consolidation following a merger or acquisition.

Enter new geographical markets more rapidly • Extensive localisation and comprehensive support for local regulatory requirements minimise time-to-market when entering new geographical markets.

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Mitigate risk with SimCorp Dimension

Mitigate risk with SimC Recent events in the financial industry have clearly illustrated the ramifications of an incomplete or loosely enforced risk management function. As a result, investors are making much more stringent demands on the level of risk they are prepared to assume, while continuing to demand a high return on their investment. This environment forces asset managers to effectively manage the many forms of inherent risk in their business models in order to minimise the bottom line impact and at the same time ensure a high degree of stakeholder satisfaction.

Mitigate risks in the investment process

standard key ratios. In addition, SimCorp Dimension’s

In the aftermath of the global financial crisis, much more

single-database, straight-through-processing architec-

emphasis has been placed on risk mitigation in the asset

ture helps mitigate operational risk by eliminating man-

management industry. Of particular concern to many asset

ual processes and ensuring decisions are based on up-

managers are market risk, counterparty risk and the risk of

to-date and accurate data and information.

non-compliance. SimCorp Dimension is designed to help asset managers effectively and accurately assess and report

Reliable market risk assessment

these and other forms of risk to all stakeholders, including

Asset managers are often selected by their clients for

management, clients and authorities, using industry

their ability to generate low-risk ‘alpha’, making it im-


Mitigate risk with SimCorp Dimension

9

Corp Dimension

Mitigate risk in the asset management industry CHALLENGES

SIMCORP DIMENSION SOLUTIONS

Avoiding unreliable quantification of risk due to

All position data is available across asset classes and the same risk

disparate systems for position data, valuation and

models can be applied to all data, thus enabling correct and consistent

key ratio calculations

quantification of risks

Eliminating compliance breaches and errors

Fully automate reporting to clients, management and authorities,

arising from manual reporting on risk figures and

reducing the risk of compliance breaches and manual errors

level of exposure Difficulties in measuring the risk impact of

Integrated solution – a single-database system with no need for interfaces or

proposed investment decisions due to the low

duplication of data, using the same set of data throughout – minimises the

quality of enterprise data

risk of having investment decisions carried out on incorrect information

Lack of transparency caused by utilising various systems

All functionality needed for different business functions in an integrated

on disparate platforms throughout the enterprise

system creates transparency and eliminates a 'black box' risk management solution

Avoiding errors in manual workflows and

Internal and external STP processes reduce the need for manual processes

transfer of data

and consequently the number of human errors

Achieving transparency in counterparty exposures

A transparent and complete overview of the counterparty exposures in the complete range of instruments as well as in collateral management and securities lending activities

Ongoing system maintenance and keeping

Semi-annual product releases, expert support and, where possible,

the system up to date

automated upgrade, validation and testing procedures minimise the risks in ongoing system maintenance and upgrades

portant to optimise many kinds of risk-adjusted perform-

uated simultaneously. SimCorp Dimension provides this

ance figures. The ability to measure, assess, monitor and

capability.

manage market risk is therefore a critical decision tool for asset managers, who are increasingly being required to

Automated risk management

report exposure and advanced market risk measures to

SimCorp Dimension provides asset managers with real-

clients and authorities at short notice. Since market factors

time access to all position data across asset classes, along

are often correlated and results are thus not additive, a

with a broad range of market risk assessment models and

reliable statement of market risk requires a consolidated

key ratios which can be applied to any level of the portfolio

approach in which all positions and risk factors are eval-

structure and at any stage of the investment process. As a


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Mitigate risk with SimCorp Dimension

result, asset managers are able to report on a broad range

Manage operational risk

of key risk ratios based on industry standard methodologies.

A certain degree of operational risk is inherent in many of

Additionally, compliance limits can be configured to ensure

the complex processes that form the core of any asset man-

that risk levels are kept within predetermined limits, with

ager’s business, requiring an active risk management culture

automatic notification as limits are approached or exceed-

along with a number of measures designed to minimise the

ed. Furthermore, SimCorp Dimension’s risk solution calcu-

potential impact. Manual processes are, by their very na-

lates all key risk measures and ratios transparently, with a

ture, subject to human error, and decision-making based

range of customisable options, while offering stress test

on incomplete or inaccurate data can lead to incorrect

scenarios and full back-test capabilities.

investment decisions. Additionally, an asset manager’s IT infrastructure, which tends to grow in complexity over

Outsourcing and data consolidation

time, can itself become a significant source of operational

The trend towards outsourcing of back-office administra-

risk, should it not deliver validated, accurate, consolidat-

tion and other non-core business functions, while creating

ed and timely information to clients, decision-makers

the opportunity to save costs, can hinder the process of

and authorities. Furthermore, the lack of control proce-

position data consolidation across internal and external

dures can significantly increase the risk of errors or, even

systems and may lead to a so-called ‘black box’ risk man-

worse, hide the incidence of fraudulent behaviour.

agement function. SimCorp Dimension’s extended enterto consolidate all relevant data in a single, comprehensive,

Mitigate risk with straight-through-processing

enterprise-wide database and leverage the SimCorp

SimCorp Dimension’s enterprise-wide process automation,

Dimension risk solution for the timely and accurate

also known as straight-through-processing or STP, is the

calculation and reporting of risk measures and ratios,

fully automated process and data flow from front to back

regardless of the number of systems providing input.

office and back to front office, where human intervention

prise data management capabilities allow asset managers

is only required for decision-making and exception-handling


Mitigate risk with SimCorp Dimension

purposes. Further, all participants in the operation, regardless of their role in the process chain, can rely on the data being up to date and high in quality. Additionally, SimCorp Dimension is equipped with sophisticated data connectivity, communication and validation capabilities that extend the STP concept beyond internal processes and into a

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“Middle office staff are extremely happy with the risk management features they have.”

Claudio Peter Prutz, Head of IT & Operations, MEAG

multitude of external front office and back office process flows. In this way, SimCorp Dimension offers asset managers a

Mitigate operational risk with SimCorp Services

‘single version of the truth’, with the same set of data

The high degree of regulation and constantly changing

being used in investment execution by the asset manager as

market conditions necessitate a never-ending stream of

by the compliance officer, and the risk manager and all oth-

system changes for most asset managers. For over ten years,

er middle and back office functions. Having only one set of

SimCorp’s perennial guarantee has delivered and continues

data across the system significantly reduces or eliminates

to deliver two major system releases per year, ensuring asset

many of the operational risks associated with manual proc-

managers are compliant in a timely manner while delivering

esses and the traditional IT infrastructure. Finally, SimCorp

new and improved system functionality to meet changing

Dimension’s comprehensive user authorisation and control

market requirements. However, with each new release of

systems ensure that system users only have access to the da-

SimCorp Dimension, the upgrade process can present a

ta and functionality needed for their daily work. Automated

number of challenges, potentially leading to increased opera-

escalation procedures implement the so-called ‘four-eye

tional risk, opportunity costs, unforeseen costs, quality issues

principle’, ensuring that transactions that exceed a user’s au-

and delays. SimCorp’s Release and Deployment Management

thority are validated by more senior staff prior to execution,

Services offer end-to-end upgrade processes with a minimum

minimising the opportunities for non-compliant activity.

of operational risk and downtime, handling the entire project


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Mitigate risk with SimCorp Dimension

with strict planning and budget control in order to decrease

of accurate counterparty data virtually impossible, with the

overall cost while increasing quality.

potential result that the true impacts are unknown should a counterparty default.

To meet the challenges following a re-configuration or implementation of new functionality, asset managers can call on

SimCorp Dimension’s single-database architecture can

SimCorp Validation and Test Management Services, who

consolidate all position data system-wide, using the same

offer certified consultants who provide expertise as well as a

valuation models for consistency in calculations and

range of automated processes for optimal validation and test

enabling extensive credit risk management capabilities.

activities. This best-practice-based service ensures that test methods and procedures are right the first time, thus saving

The system incorporates a number of powerful key ratios,

resources and reducing the risk of and costs related to system

such as ‘Loss Given Default (LGD)’, which utilise the full

downtime. An additional benefit is the fact that test cases are

overview of all direct and indirect agreements and provide

reusable, which saves time and effort in future upgrades.

an accurate and consolidated view of counterparties.

Mitigate counterparty risk

SimCorp Dimension also incorporates extensive collateral

The default of a business partner or counterparty can, in a

management capabilities, allowing asset managers to easily

worst-case scenario, be catastrophic and at best very costly.

obtain an overview of all collateral and market positions,

The accumulated risk toward any specific counterparty,

the transactions and what has been agreed in the Credit

which can span many agreements, includes every piece of

Support Annex (CSA), e.g. the margin call conditions and

business with that organisation, ranging from equity posi-

eligible collateral.

tions in the organisation’s stock, unsettled trades and derivatives contracts with the organisation to derivatives contracts with underlying assets issued by the organisation, lending agreements, cash and security collateral, bond issues and so on. Adding to this, a complicated systems environment can make the collection and consolidation

Want to learn more? Find more information about risk management at www.simcorp.com/mitigaterisk and order the book ‘Understanding the financial crisis: investment, risk and governance’, published by SimCorp StrategyLab, at www.amazon.com or www.amazon.co.uk.

‘Understanding the financial crisis: investment, risk and governance’

‘Report on Global Investment Management Risk Survey 2009’

‘Time to rethink risk management?’


Mitigate risk with SimCorp Dimension

Integrated Investment Processing with SimCorp Dimension SimCorp Dimension allows asset management organisations to pre-define their generic investment strategies, asset allocation decisions, compliance limits and benchmarks, completely automating processes from initial asset allocation through to the actual buying or selling of individual securities. Furthermore, as new or existing clients add or change mandates, SimCorp Dimension will also automatically make certain that individual asset allocation requests and limits are applied, ensuring that the resulting trades are completely in alignment with both internal investment strategies and client requests. This unprecedented level of automation, also known as Integrated Investment Processing, offers investment management organisations the option of consolidating the resources that manage portfolios to be more in line with corporate asset management strategies, with the potential to significantly scale the business with existing headcount, or alternatively maintain business activity with significantly reduced headcount requirements and thus lower the labour cost base.

Integrated Investment Processing with SimCorp Dimension INVESTMENT PLAN

Investor

MODEL PORTFOLIO

INVESTMENT DECISION PROCESSING

Mandate 1

Asset class n

Security 1

Investment decision

Mandate 2

Asset class n

Security 2

Order

Mandate 3

Asset class n

Security 3

Pre-trade compliance

Security 4

Trade

Mandate n

Security n

OPERATIONS

Post-trade compliance

Risk

Performance

Confirmation and settlement

Accounting

Corporate actions

Reconciliation

Client and legal reporting

SimCorp Dimension’s Integrated Investment Processing allows asset managers to: • focus on core competencies, for example portfolio performance analysis, stock picking and investment management decision-making; • utilise the Integrated Investment Processing structures as the basis for structuring both risk and performance analysis, conferring significant savings in administering portfolios across the enterprise; • reduce operational errors and associated costs by providing a comprehensive overview.

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Reduce cost with SimCorp Dimension

Reduce cost with SimCor In the intense competitive environment inherent in the asset management industry, asset managers are compelled to develop new and improved products as a means to attract new clients. Coupled with this is a constant pressure on cost levels as both regulators and clients demand more stringent risk management protocols, sufficient liquidity and position coverage, and greatly increased expectations concerning transparency.

Cost reduction throughout the organisation

Crucial focus on operational costs

Cost management has become not only a necessity, but an

high quality data, which ensures that investment and other

integral part of the strategic fabric of many asset manag-

decisions are based on the best possible premise. However,

ment organisations, holding a crucial role in ensuring con-

the greater the complexity of the system environment, the

A crucial ingredient of any cost management initiative is

tinued profitability. SimCorp Dimension supports these

greater the effort required to validate, consolidate and

organisations with a range of innovative capabilities that,

reconcile data before analysis can even commence. Conse-

among other things, reduce personnel requirements,

quently, the already high cost of providing analyses can be

eliminate manual processes and minimise exception

exacerbated by errors, exception processing and unneces-

processing.

sary iterations in decision processes.


Reduce cost with SimCorp Dimension

rp Dimension Reduce cost in the asset management industry CHALLENGES

SIMCORP DIMENSION SOLUTIONS

Increasing operational cost of maintaining disparate

One integrated solution, offering enterprise-wide func-

systems for different business functions like risk manage-

tionality based on a single database reducing operational

ment, accounting, reporting etc.

costs

Growing cost of using different systems to comply

Utilising one set of data throughout the system reduces

with various local tax and accounting standards

costly duplicate manual processes and also avoids the need to train staff on multiple systems

Rising cost related to maintaining external interfaces

Minimise usage of external interfaces, thereby reducing the costs related to maintaining them

Human errors due to manual processes

Automation of labour–intensive processes reduces human errors and related costs

Additional resources required for manual

Automated reporting functionality significantly reduces

creation of reports

operational costs

Lengthy and costly software implementations

SimCorp Services offer experienced business consultants to help optimise system usage, train client staff and leverage industry best practises

Reduce operational costs with integrated investment

virtually eliminates manual processes and consequently

management software

the number of processing errors, significantly reducing

SimCorp Dimension’s straight-through-processing capabili-

staff requirements to support the business. Furthermore,

ties and single database architecture not only help to

its open architecture enables SimCorp Dimension to inte-

lower operational risk, but also to minimise operational

grate and reconcile data with other systems if and when

costs significantly. The need to validate and reconcile

needed, to achieve consistent and accurate performance

data from disparate systems is significantly reduced or

measurement as well as generate accurate client and in-

eliminated, and data accuracy can be guaranteed, thus

ternal reports.

ensuring that analysis and reporting is based on the best possible foundation. Straight-through-processing also

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Reduce cost with SimCorp Dimension

SimCorp Services help optimise processes

and efficient manner, they are unable to focus on their

SimCorp Services are provided by experienced senior

core competencies. It is an unfortunate fact that many

SimCorp business consultants who work closely with

asset managers suffer from complicated, poorly inte-

clients to understand their detailed needs and business

grated systems environments that necessitate the dupli-

parameters, and to help define new and optimise existing

cation of data and processes which tend to be labour

processes that incorporate anticipated system usage. By

intensive, manual and highly error prone.

doing so, SimCorp helps reduce operational costs by making sure the system is utilised in the best way to

Automated processes eliminate manual errors

optimise an asset manager’s workflows, for instance to

SimCorp Dimension helps asset managers significantly

process transactions and perform end-of-period portfolio

reduce costs through automation of labour intensive and

valuations. SimCorp continually expands its services offer-

manual processes. This allows staff to focus on their core

ings to incorporate new developments in both industry

competencies and the more complicated exception hand-

best practices and the semi-annual SimCorp Dimension

ling procedures. SimCorp Dimension captures data once

releases.

and then reuses it throughout the system, which reduces the costs related to manual data entry and maintaining

Reduce labour costs with SimCorp Dimension

interfaces between disparate systems.

No matter how talented the staff, if they do not have a

Additionally, SimCorp Dimension allows asset managers to

complete set of tools to support daily processes in a timely

pre-define their generic investment strategies, asset alloca-


Reduce cost with SimCorp Dimension

tion decisions, compliance limits and benchmarks, com-

Reduce labour costs with SimCorp Services

pletely automating processes from initial asset allocation

SimCorp’s Incident and Problem Management Services

through to the actual buying or selling of individual securi-

address the challenges met by SimCorp Dimension clients

ties.

regarding efficient management of one-off incidents.

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SimCorp provides certified consultants for particular events This unprecedented level of automation, also known as In-

ranging from covering the absence of a critical staff member

tegrated Investment Processing, offers investment manage-

to taking over first-level support entirely. The potential cost

ment organisations the option to consolidate the resources

savings achieved in terms of in-house overhead are clear,

that manage portfolios to be more in line with corporate

while even greater benefit derives from the wealth of

investment management strategies, with the potential to

knowledge and experience SimCorp consultants accrue

significantly scale the business using existing headcount, or

from working constantly with SimCorp Dimension opera-

alternatively to maintain business activity with significantly

tions issues.

reduced headcount requirements and consequently lower the labour cost base.

“SimCorp Dimension has allowed us to automate many routine tasks, such as producing reports. It is an extremely flexible system.” Claudio Peter Prutz, Head of IT & Operations, MEAG

Want to learn more? To gain more insight into strategic cost management, go to www.simcorp.com/reducecost and order the book ‘Operational control in asset management: processes and costs’, published by SimCorp StrategyLab, at www.amazon.com or www.amazon.co.uk.

‘Operational control in asset management: processes and costs’

‘Report on Global Investment Management Cost Survey 2009’

‘Strategic cost management with SimCorp Dimension’


18

Enable growth with SimCorp Dimension

Enable growth with Sim Asset managers can realise growth in a number of ways: through organic strategies such as product differentiation and low-cost leadership, accelerated growth strategies involving entering new geographical markets or mergers and acquisitions, or a combination of these strategies. To be successful, asset managers require an investment management system that supports expansion while minimising a corresponding increase in cost.

Create value through scalability, cost reduction and product innovation

Value creation through innovation

SimCorp Dimension is a comprehensive investment man-

also known as a differentiation strategy, focus on offering

agement system offering asset management organisations

significantly differentiated products and services to the

unprecedented flexibility, scalability, functionality, usabili-

market compared to competitors, which in turn can help

ty, performance and reliability in a highly configurable and

retain existing and attract new clients. Keys to success for

Asset managers that choose a product innovation strategy,

fully integrated modular solution and is uniquely capable

this strategy are broad instrument coverage and the ability

of supporting an asset manager’s current and future stra-

to support new and changing investment and product

tegic and tactical initiatives, facilitating years of growth.

strategies in a timely and efficient manner.


Enable growth with SimCorp Dimension

19

mCorp Dimension

Enable growth in the asset management industry CHALLENGES

SIMCORP DIMENSION SOLUTIONS

Insufficient coverage of financial instruments curtails

Support for an innovation-driven growth strategy through an

product innovation

extensive coverage of financial instruments

Manual processes limit the ability to provide

Unparalleled number of automated processes and STP flows

low-cost offers to the market

that allow asset managers to significantly reduce costs related to manual errors

Managing non-standard and exotic instruments

XpressInstruments enable rapid implementation of complex and non-standardised instruments and can be included in portfolio modelling

Increasing volumes and complexity without increasing

New products, new clients and higher transaction volumes can

cost

be accommodated without a corresponding increase in cost

Complying with local requirements when entering new

New tax and accounting standards and reporting require-

markets

ments can be accommodated without additional investments in development

Maintaining a high competency level of staff when add-

SimCorp Services offers Educational Services that include Prod-

ing new instruments or entering new markets

uct Training, SimCorp Certification and End-user Training.

“The best thing is that previously any new business requirement involved “The bestadd-on thing issystem that previously any work-around, the business... Overall, we can be more another or a complicated but implementing new business requirement involvedup the whole forward-looking with theoffice system we SimCorp Dimension has opened of the front and back for us soadd-on we havesystem a lot or more flexibility in the business... another a complicated have now.” Overall, we can be more forward-looking with the system we now.” work-around, but implementing Jan have Weber, CFO, DIAM International Jan Weber, CFO, DIAM International SimCorp Dimension has opened up the whole of the front and back office for us so we have a lot more flexibility in


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Enable growth with SimCorp Dimension

SimCorp Dimension is designed for innovation

Support for complex instruments

Core to SimCorp Dimension’s effectiveness as an advanced

Many asset managers, however, have moved beyond

and flexible enterprise solution is its broad and comprehen-

standard instruments and now include structured prod-

sive instrument coverage, coverage which extends through-

ucts, exotic derivatives and hybrids in their investment

out the investment management process: front, middle

strategies. To accommodate these instruments, SimCorp

and back office. From initial contract to final maturity,

Dimension incorporates XpressInstruments, a seamlessly

SimCorp Dimension takes care of maintaining the state

integrated tool which allows support for complex and

and history of all instruments and events. In addition, all

non-standardised instruments to be added rapidly. Such

operational processes relating to instruments and events

support includes automation of operational processes,

are transparent, with information automatically available

e.g. confirmations, fixings, payments and deliveries, as

to all other business functions, such as front office analy-

well as prompts for option decisions. Therefore, positions

sis, performance measurement and cash management.

that were previously managed on spreadsheets can now

“With SimCorp Dimension’s automated, scalable STP processing and improved audit trail, I have great expectations to DnB NOR Asset Management’s corporate actions processing during future increases in business volume and activity on emerging markets.” Yngve Andersen, Head of Settlement, DnB Nor

be handled within SimCorp Dimension alongside standard exchange-traded and OTC products in a single seamless environment. The time required to implement this kind of support for a new instrument is very short, and the operational risk associated with the use of such instruments on spreadsheets or other tools outside the organisation’s core processing system is eliminated. As a single framework solution, SimCorp Dimension enables access to portfolio overview tools in one seamless front-to-back system. In addition to support for operational processes, XpressInstruments support multiple market-tested pricing and valuations models delivered by FINCAD™. More models


Enable growth with SimCorp Dimension

21

are added as market requirements change and can be

os, scenarios and strategies that can be managed within

used for new and existing instruments immediately.

the system and, as a result, new portfolios and products, new tax and accounting standards, reporting requirements

Educate to enable growth

and higher transaction volumes can be accommodated

To ensure that SimCorp Dimension supports innovation in

without a corresponding increase in costs.

an optimal manner, SimCorp Services offers Educational Services that include Product Training, SimCorp Certification and End-user Training. Utilising these Educational Services will enable organisations to leverage SimCorp Dimension capabilities quickly and efficiently, thus reducing time-tomarket for new innovations, products, services and other catalysts for growth.

“We’re confident we’ll be able to adapt to changing requirements of our clients, no matter how demanding they might be.” Jan Weber, CFO, DIAM International

Scalability: a key ingredient to growth To accelerate growth, some asset managers choose to enter new markets, add additional products to the platform or enter into merger or acquisition transactions.

SimCorp Dimension is a strategic platform that can assist

The scalability of the investment management system

asset managers in the case of mergers and acquisitions.

plays an important role in these processes and can sig-

Comprehensive connectivity and communications capabili-

nificantly impact the profitability of new ventures.

ties, including data import and export, data filtering, data translation, data validation, and externally triggered online

Scalability with SimCorp Dimension

and batch processing, combine to make most integration

SimCorp Dimension enables asset managers to limit la-

tasks a configuration exercise rather than programming.

bour costs and handle additional clients while maintaining

Additionally, SimCorp Dimension’s comprehensive data

service levels. Furthermore, SimCorp Dimension is highly

model and its extensive enterprise-wide functionality

flexible with respect to the amount of holdings, portfoli-

means that consolidation of legacy systems into SimCorp


22

Enable growth with SimCorp Dimension

Dimension is always an option in the short, medium or

Automate processes to achieve low-cost leadership

long term. These facilities form the basis of its robust

SimCorp Dimension provides an unparalleled number of

extended enterprise data capabilities, and SimCorp

automated processes and STP workflows that allow asset

Dimension is therefore able to meet all the demands

management companies to significantly reduce costs. The

an IT department typically faces after a merger, regard-

automated processes, with exception management as the

less of the system strategy chosen.

only manual intervention, can be applied from front office to back office, which drastically reduces the costs involved

Growth through low-cost leadership

in managing client mandates. SimCorp Dimension’s clear

Asset managers that follow a low-cost leadership strategy

and open database design means that diverse reporting re-

are constantly reviewing their operating models and look-

quirements, such as solvency reports and periodic financial

ing for opportunities to optimise the cost of production.

statements for regulators, can easily be met.

Information technology holds a central role in this strategy by eliminating error-prone manual processes, which typically offers a rapid and significant return on investment.


Enable growth with SimCorp Dimension

Want to learn more? To learn more about growth enabling strategies, visit www.simcorp.com/enablegrowth and order the book ‘Growth and value creation in asset management’, published by SimCorp StrategyLab, at www.amazon.com or www.amazon.co.uk.

‘Growth and value creation in asset management’

‘Report on Global Investment Management Growth Survey 2010’

‘Enable growth with SimCorp Dimension’

23


24

SimCorp Dimension for the asset management industry

SimCorp Dimension for th management industry SimCorp Dimension supports the investment processing needs of the asset management industry While asset managers tend to follow a regular and predict-

adjust standard workflows and processes to meet their unique

able set of processes to satisfy stakeholder and regulatory

business needs and gain a competitive advantage. From

obligations, there are times when asset managers need to

modelling trades and placing orders, through compliance,

The fully integrated SimCorp Dimension solution automates asset management workflows

Start of period

Portfolio management

across the front, middle and back office.

Investment Corporate actions

Fund management

management strategies

Back office transactions

Benchmarking

Pre-check compliance

Reporting

Rebalancing

Trading

Orders

Asset managem


SimCorp Dimension for the asset management industry

he asset risk and performance checks and on to settlement,

SimCorp Dimension system enables asset management

accounting, reporting and connecting with external data

companies to grow and capture market share.

providers, the highly automated and fully integrated

Reconciliation control

Data quality

Valuation process

End- of-period

Matching

Market data validation

Distribution

Post-check compliance

Settlement

Fee management

Performance

Reconciliation

Tax figures

Risk analysis

Cash management

Legal reporting

End-of-period

Collateral management and securities lending

ment workflow

Management reporting

Client reporting

25


26

SimCorp: global investment management software developer of the future

SimCorp: global investmen software developer of th Choosing an investment management platform is no trivial matter. SimCorp understands that a decision to invest in SimCorp Dimension will impact a client’s business for many years to come.

SimCorp headquarters in Copenhagen, Denmark

Introducing SimCorp

same story: working with SimCorp creates solutions

SimCorp enables global investment management organi-

that support both current and future business needs. With

sations to mitigate risk, reduce cost and enable growtht

SimCorp, clients have a reliable partner who understands

hrough development and implementation of its integrated

their organisation’s business needs and provides value-add-

and market-leading financial software solution SimCorp

ed services to their business. Long-term strategic client rela-

Dimension.

tions and a dedicated commitment to supporting clients’ business are fundamentals of the SimCorp business model.

Solid foundation Founded in 1971, SimCorp has decades of experience

Perennial guarantee

in developing solutions for the financial sector. Head-

An indispensable prerequisite for our clients’ future devel-

quartered in Denmark and with subsidiaries throughout

opment is SimCorp’s ability to develop, maintain and pro-

Europe, North America and Asia Pacific, SimCorp is list-

vide an innovative product which, by virtue of unique and

ed on NASDAQ OMX Copenhagen A/S stock exchange

timely functionality and quality, will allow our clients to

and has a continuous track record of creating value for

keep pace with an ever-changing market characterised

its clients, shareholders and employees alike.

by stricter investment management process requirements. With semi-annual releases containing new functionality,

Cutting edge

SimCorp grows with its clients and the demands of the

SimCorp’s clients include financial institutions, asset

market – and it is SimCorp’s perennial guarantee never to

managers, insurance companies, pension funds, mutual

offer its clients an outdated solution.

funds, banks and mortgage lenders, all of whom rely on SimCorp’s ability to constantly be at the cutting edge of

Superior know-how

developments in the investment management industry.

More than 1,100 enthusiastic employees worldwide are

More than 170 satisfied clients worldwide will tell the

focusing all of their efforts on a single investment man-


SimCorp: global investment management software developer of the future

1,000 EUR

nt management he future 200

SimCorp Revenue EURm Revenue

190

180 174

180 170 156

160 150 140

50 45 40 35 30 25 20 15 10 5 0

127

130

EBIT EURm Profit from operations 38 (EBIT) 34

38

40

22

2005

2006

2007

2008

2009

120 110

102

100

25

90

20

80

Development cost related to revenue in % 24.6 20.9

20.5

15

Development cost related to revenue

70 10

60 50

5

40

0

30

24.6

22.1

2005

2006

2007

2008

2009

20 10 0 2005

2006

2007

2008

2009

Development in SimCorp’s financial performance 2005–2009.

SimCorp’s financial performance, 2005-2009 agement system: SimCorp Dimension. Their core competencies are in economics, finance and IT, and serving as the strategic foundation of SimCorp’s business activities, this experience will constantly be expanded. Almost 25% of SimCorp’s revenue is re-invested in research and system development related tasks, which is our clients’ guarantee that SimCorp is relentlessly dedicated to providing truly advanced solutions and services.

Want to learn more? To learn more about SimCorp’s financial performance, download its latest annual report at www.simcorp.com/ financialreports.

27


28

SimCorp StrategyLab

Thought leadership in inves management: SimCorp S In direct response to a new agenda in the investment management industry with increased focus on risk management, cost control and growth opportunities, SimCorp established its independent research institution, SimCorp StrategyLab, in December 2008. Through its extensive research and know-how, the institution’s aim is to provide insight into some of the many challenges facing professional asset managers throughout the world. Going forward, SimCorp StrategyLab will continue to seek to suggest ways to meet these challenges and to share best practices.

Ingo Walter, Director of SimCorp StrategyLab, is Vice Dean of Faculty and Seymour Milstein Professor at the Stern School of Business, NYU. Professor Walter has had visiting professorial appointments worldwide and remains a Visiting Professor at INSEAD in Fontainebleau, France. Professor Walter's principal areas of academic activity include international trade policy, international banking, environmental economics and economics of multinational corporate operations. To find appropriate solutions and to gather relevant best

challenges in the financial sector. The research programme

practices for the top strategic institutional levels of the

is carried out in close collaboration with internationally

investment management industry, SimCorp StrategyLab

recognised academics and established industry experts. As

carries out its own research and analysis of trends and

a result, SimCorp StrategyLab is able to provide competent


SimCorp StrategyLab

stment StrategyLab suggestions for best practices which are intended to minimise risk, find ways to achieve sustainable cost savings and enable growth.

Organisation SimCorp StrategyLab is formally organised under the

Want to learn more?

management of a board of directors. The chairman of SimCorp StrategyLab’s board is the CEO of SimCorp,

SimCorp StrategyLab conducts research that applies

Peter L. Ravn, Ph.D. SimCorp StrategyLab is headed by

to strategic levels at global asset management

the renowned Dr. Ingo Walter, Seymour Milstein Professor

companies. The research is aimed at finding ways to

at the Stern School of Business of New York University,

allow asset managers to mitigate risk, reduce cost

who is in charge of the research institution’s academic

and enable growth, with efforts focused on defining

affiliations and oversees the quality of its research work

industry best practices. For the 2010-2011 research

and related activities. Along with SimCorp StrategyLab’s

programme, a team of leading thinkers in the

partners, and building bridges between theory and prac-

academic world and the financial industry has

tice, are leading academics, industry experts and execu-

been gathered by SimCorp StrategyLab especially to

tives who contribute to its research programme and other

examine the interactions between the challenges and

activities.

best practices in the asset management industry.

Mission The mission of SimCorp StrategyLab is to contribute to identifying ways of mitigating risk, reducing cost and enabling growth in the global investment management industry.

Download the profile brochure at www.simcorpstrategylab.com to learn more about the vision and mission of SimCorp StrategyLab.

Vision The vision of SimCorp StrategyLab is to become a renowned and trusted thought leader in the investment management industry through the contribution of applicable research and knowledge in matters of strategic importance for IT and investment management.

Go to www.simcorpstrategylab.com to learn more about SimCorp StrategyLab’s research programme and activities.

29


30

Contact information

Contact information Australia

Germany

Sweden

Sydney office:

Bad Homburg (Frankfurt) office:

Stockholm office:

+61 2 9241 4222

+49 6172 9240-0

+46 8 528 01500

Munich office: Austria

Switzerland

+49 89 306592-0

Vienna office: +43 1 5120099

Zurich office: Hong Kong

+41 44 360 5900

Hong Kong office: Belgium

Ukraine

+852 2521 2680

Brussels office: +32 2 213 3000

Kiev office: Luxembourg

+380 444 958 600

Brussels office: Canada

United Kingdom

+32 2 213 3000

New York office: +1 212 994 9400

London office: Netherlands

+44 20 7260 1900

Amsterdam office: Denmark

USA

+32 2 213 3000

Copenhagen office: +45 3544 8800 Finland

New York office: Norway

+1 212 994 9400

Oslo office:

Los Angeles office:

+47 2310 4100

+1 424 354 5151

Singapore

www.simcorp.com

Singapore office:

info@simcorp.com

Helsinki office: +358 9 685 2010 France

+65 6823 1517

Paris office: +33 1 5535 5454

Legal notice The contents of this publication are for general informa-

reproduced, stored in or introduced into a retrieval sys-

tion and illustrative purposes only and are used at the

tem, or transmitted in any form, by any means (electron-

reader’s own risk. SimCorp makes all reasonable endea-

ic, mechanical, photocopying, recording or otherwise) or

vours to ensure the accuracy of the information. Howev-

for any purpose without the express written permission

er, SimCorp does not guarantee or warrant the accuracy

of SimCorp A/S.

or completeness, factual correctness or reliability of any information in this publication and does not accept liability

SimCorp, the SimCorp logo, SimCorp Dimension and

for errors, omissions, inaccuracies or typographical errors.

SimCorp Services are either registered trademarks or

The views and opinions expressed in this publication are

trademarks of SimCorp A/S in Denmark and/or other

not necessarily those of SimCorp.

countries. Refer to www.simcorp.com/trademarks for a full list of SimCorp A/S trademarks. Other trademarks

Š 2010 SimCorp A/S. All rights reserved. Without limiting

referred to in this document are the property of their

rights under copyright, no part of this document may be

respective owners.


About SimCorp SimCorp enables global investment management organisations to mitigate risk, reduce cost and enable growth through development and implementation of its integrated and market-leading financial software solution SimCorp Dimension. SimCorp is headquartered in Copenhagen with subsidiaries and branches in Amsterdam, Brussels, Frankfurt, Helsinki, Hong Kong, Kiev, London, Los Angeles, Luxembourg, Munich, New York, Oslo, Paris, Singapore, Stockholm, Sydney, Toronto, Vienna and Zurich.

SimCorp Dimension for the asset management industry  

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