The vendor has launched a hosted offering that promises to facilitate data automation for collective investment trusts (CITs), target date funds, fund of funds, wrapped funds, and variable annuities.
W. Whitfield Athey, CEO, Delta Data
Delta Data, a data management systems vendor for mutual funds, is launching a solution to help trust companies, retirement recordkeepers, insurance companies and broker-dealers with the construction, trade execution and administration of highly customized proprietary funds.
The new Proprietary Product Manager (PPM) service will facilitate the development and maintenance of proprietary products such as collective investment trusts (CITs), target date funds, fund of funds, wrapped funds, and variable annuities, according to Delta Data officials.
In general, managing proprietary products has been “a manual and time-consuming ordeal,” according to Delta Data officials. “Proprietary products carry much more complexity when it comes to data management and are typically managed in a system separate from ‘40 Act funds where reference data, allocation information and pricing is supplied by the third-party asset manager.”
In addition, the customization of proprietary products, complete with multiple fee tiers complicates matters, vendor officials say.
“Distributors often carry thousands of slightly different versions that may have the same lead security. In most legacy platforms each permutation is treated as an entirely different security, creating additional work for operations teams tasked with maintaining them. PPM’s technology tracks the various versions of products and allows users to initiate changes at the lead security level,” according to Delta Data officials.
Large record-keepers and insurance companies often serve as registered advisors on “a lot of proprietary products, and in that role, they have to perform many functions that an asset manager would traditionally perform,” says W. Whitfield Athey, CEO of Delta Data, in a prepared statement. Yet traditional asset management solutions don’t offer the capabilities that need to be applied to the operational issues of proprietary products.
The PPM offering assists in the management of “custom securities by distributors in a single system of record alongside traditional mutual funds — eliminating manual processes involved in reconciling enterprise systems, which streamlines account management, strengthens sales pipelines, and reduces risk,” vendor officials say.
The solution, hosted by Columbus, Ga.-based Delta Data, actually automates “data inheritance from underlying holding(s) to the proprietary product to drastically reduce the amount of manual entry that is required to create a custom security,” Athey tells FTF News in response to an inquiry.
In fact, the new system “automates rebalancing of the synthetic security when the holdings get outside of an acceptable tolerance of percent allocations,” Athey says. “It automates the glidepath maintenance of Target Date Funds. It automates the creation of series investments that have bumper expense bands relative to a lead security. In other words, PPM can construct 40 securities in a series based on one instruction with designated fee increment intervals,” he adds.
Delta Data is pitching PPM at end-user firms such as insurance companies, retirement recordkeeping, collective investment trust manufacturers, trust companies. “The tool is primarily designed to support back-office functions within these organizations, but it does have a front-office component to allow RIAs [registered investment advisors] and consultants controlled access for selling to the investment community,” Athey says. The company already has two clients that are in the implementation phase of the new offering.
Delta Data offers hosted (software-as-a-service) and locally installed back-end processing solutions for the mutual funds industry, officials say.
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