Canadian firm Mawer Investment Management is embarking upon its most ambitious IT project in its 46-year history.
Mawer Investment Management Ltd.’s motto is “Be Boring. Make Money.” But its plans for a major IT infrastructure overhaul are anything but dull.
Mawer (pronounced “more”) has just embarked upon its most ambitious IT transformation project in its 46-year history.
In a major initiative announced in September, the privately owned, independent firm will be working with investment management solutions vendor SimCorp, based in Copenhagen, Denmark, to replace an incumbent order management system (OMS), an investment book of record (IBOR)/accounting book of record (ABOR), and an internally developed data warehouse.
“It’s essentially a spine replacement,” says Sara Poldaas, director, portfolio services at Mawer, which is based in Calgary, a city in the Canadian province of Alberta, on the country’s West Coast. “So, it’s a big exercise. And, so, I think it’s probably fair to say that we’ve never embarked upon an endeavor quite this big before, but we’re feeling really excited about it. We’ve assembled an incredible network of experts to help us with this project,” Poldaas says.
The impetus for the overhaul began in late 2018 as the firm was completing one of its frequent reviews of its overall operating model for securities trading, Poldaas says. This included a reevaluation of existing technology tools and platforms. In fact, the firm debated whether to remain with a best-of-breed approach or consolidate onto a main system that allows for reduced integration, more scalability, and lower costs. The consolidation strategy won out.
“We want to reduce the amount of complexity that we had in some of our operational processes,” Poldaas explains. “So, for example, we no longer need to build complex integrations between systems, and do reconciliations between those systems. We no longer want a small army of people that work to make sure that all of this data and information between the systems is reconciled and up to date.”
The firm then reached out to its current armies with the help of Citisoft, a consultancy that specializes in the IT and operations challenges of investment management firms.
“We engaged Citisoft to help us with that exercise, and they spent probably four months with us last summer, speaking with well over 50 people across the business to learn about our current operating model,” Poldaas says.
“They also reviewed our plans and growth objectives. They helped us put together a target operating model. … There were three things that were off limits: one, our investment process; two HR [human resources]: and three, we weren’t looking for any technology recommendations,” she adds. “They did a really fantastic job helping us to identify what were the things that we definitely were going to need to consider changing, and how we might prioritize that and also come up with a roadmap.”
Next, Mawer had discussions with a variety of vendors through “a very lengthy” firm-wide request for proposal and assessment program” before landing on SimCorp. “The main reason why we decided to go with them … is their ability to simplify and reduce the number of platforms that we need to operate and integrate.”
The firm will be using SimCorp’s Dimension, a multi-asset, front-to-back, investment management platform.
“We’re looking to leverage the system capacity to build some capabilities in the middle and back office functionality that will really allow us to scale in a way that doesn’t continually expose us to risk in terms of the amount of people that we need to support the system, the amount of integrations that we need to build, the amount of infrastructure and architecture that we need to have to support all of those complex integrations,” Poldaas says.
The SimCorp Dimension installation will ultimately replace the incumbent the SS&C Advent Portfolio Exchange (APX), an integrated portfolio management and client relationship management (CRM) solution. The SS&C Advent system provides IBOR/ABOR functions.
When reached for a comment, SS&C Technologies officials declined to comment upon the situation.
The firm will also be replacing the incumbent OMS from Charles River Development, which is now part of State Street. “It’s also worth noting that our custodian and fund accountant in Canada is State Street. We also have a collective investment vehicle in the United States for whom our custodian is State Street,” Poldaas says.
“We spent some time thinking about how best to leverage that opportunity. State Street has some exciting plans for building out their own Accounting Book of Record and some middle office functionality,” Poldaas says. “But ultimately their timing just doesn’t align with our requirements. They don’t have it built yet, and although they have a very exciting roadmap plan, it’s many years until it’s functional in the way that we need it to be. So, ultimately, we decided that we weren’t in a position to be able to wait for that.”
“State Street and Mawer Investment Management have a strong and long-standing relationship,” a spokesperson for State Street tells FTF News. “State Street is proud to provide an open architecture solution that empowers clients to be nimble and easily develop new capabilities as they look to scale. We are committed to partnering with clients as they continue to grow.”
The new OMS will also present Mawer with a different kind of challenge.
“So, the one piece that isn’t a clear win on for us is, frankly, is the front-office module,” Poldaas says. “SimCorp has spent a lot of time and energy and developed a lot of expertise building this front office module, their OMS, but there is nobody in Canada currently that uses it. And, so from that perspective, we could argue that we’re a little bit of a guinea pig.”
SimCorp’s front-office solutions are in place at more than 140 clients worldwide, including asset managers, pension funds, insurance firms, and banks “as the trend for operational consolidation continues,” says James Corrigan, executive vice president and managing director for SimCorp North America, in response to an inquiry for clarification from FTF News.
“These capabilities in addition to our full suite of technology solutions provides clients with a complete offer to successfully meet their business outcomes and operational needs,” Corrigan says. “We are pleased to extend these capabilities to Mawer and are confident that we can robustly support their investment operations and contribute to the goals they have laid out.”
SimCorp is “committed to evolving the front office, through research and development into our solutions and services, and the creation of a broad ecosystem of front-office partnerships, including TradingScreen, OTCX, and BidFX,” Corrigan adds.
“Having served asset managers and asset owners in Canada, the U.S., and globally, we continue to build on our established market approved, front-to-back, multi-asset investment platform, with the introduction of our cloud infrastructure and, holistic data management and managed services, designed to deliver faster, accessible data, together with analytical insights, to support investment decision-making,” Corrigan says.
The other major component of Mawer’s IT journey is a move away from the ongoing, internal maintenance and development of its data warehouse, which SimCorp will take over. “What we’ve learned after implementing our own enterprise data warehouse is really just about the importance of data management and rigor when it comes to data usage and storage,” Poldaas says.
“Over the last five years, it’s become really apparent that we have the foundational building blocks in hand,” Poldaas says. “What we need is a system that can keep up, so that we’re not having to develop everything ourselves and that we can work with a partner who has significant expertise.”
The spine replacement will take an estimated 18 to 24 months to complete.
