SimCorp Dimension gets a refresh intended to help firms with hedge fund and private equity investments.
Hugues Chabanis, product manager for alternative investments, SimCorp
Investment and accounting solutions vendor SimCorp is offering new support for hedge funds and private equity firms via its latest upgrade of SimCorp Dimension, which includes new modules and enhancements.
“As part of SimCorp’s long term strategy, alternatives investments is one of SimCorp’s strategic priorities, as client feedback and industry expectations forecast consistent and long-term growth for this asset class,” Hugues Chabanis, the Paris-based alternatives investments product manager for SimCorp, tells FTF News. Chabanis oversees the development of SimCorp’s solutions related to alternative investments such as private equity, real estate and infrastructure.
“SimCorp clients too, are looking for granular functionality as their exposure grows from handling [alternative investments] as an additional instrument type to having whole teams dedicated to it,” Chabanis says. “At a time when alternatives are still a niche market catered for by niche vendors, SimCorp’s strategic advantage has been demonstrated in its established front-to-back offering, SimCorp Dimension. Our strong client partnerships also play a significant role in global product development.”
SimCorp Release 6.3 also wants to help firms build an all-in-one alternatives investments manager that will lead to a level of straight through processing (STP) in the alternatives space that matches the management of traditional asset classes, “across key functions from performance, settlement and reporting to accounting,” officials say.
Automation and integration are needed for illiquid, alternative investments such as private equity, real estate and infrastructure.
“Fragmented, legacy and best of breed systems all have a part to play here, and we are seeing renewed interest from the market for a consolidated strategy not just toward traditional asset classes but also alternatives,” Chabanis says.
Over the years, SimCorp has accommodated demand for alternatives support via investment book of record (IBOR) and accounting book of record (ABOR) offerings, and introduced a separate private debt module last year, Chabanis says.
“The new alternatives manager transforms the client experience from instrument-based functionality across the vertical modules to front-to-back functionality, in one dedicated module,” Chabanis says. The alternatives investments manager offers “improved functionality, such as a 360-degree analytics dashboard, and automated workflows. … Ultimately, LPs will be able to consolidate and automate their alternatives investments across the entire lifecycle, in the same way they do with traditional asset classes,” he adds.
The new module offers buy-side firms investing in alternatives “a significant opportunity, given that the current strategy for the growing number of Limited Partners (LPs) is a mix of niche solutions, manual workarounds and for SimCorp clients, the IBOR and ABOR functionality within SimCorp Dimension,” Chabanis say. “To date, firms have tended to spend significant money on niche or unicorn systems to overcome lack of integration in the front office. This has resulted in a spaghetti system of additional systems and interfaces, manual workarounds and reconciliation, and for non SimCorp clients, insufficient accounting support.”
In addition, SimCorp’s new alternatives support will be “a fully integrated part of our front-to-back investment management system, SimCorp Dimension, and runs on the same single source of data,” Chabanis says. “As a result, firms are provided with the same support for multi-asset class strategies in one system and do not need to handle alternative investments on a separate application. At the same time, they can cut down on costly interfaces, data warehousing and consolidate risk and performance.”
Aside from the alternatives support, SimCorp Dimension Release 6.3 will also offer:
- Strategy Manager for Solvency II
This new solution offers enhanced functionality for compliance with Solvency II, which compels firms “to carry out more in-depth analysis of the various investment outcomes on their Solvency Capital Requirement and consider this analysis more actively in their investment decisions,” according to SimCorp.
“By introducing the new ‘what-if’ functionality, the Strategy Manager solution enables users to simulate different strategies and actively manage Solvency Capital Requirements. This analysis is valuable to pension funds and insurers, for steering their strategy and investments and for deciding how to handle large market movements. The solution is equally valuable for asset managers with a wish to provide best-in-class services to asset owners,” according to SimCorp.
- Collateral Management
The upgrade integrates front office and collateral management workflows, “initially enabling portfolio managers to block positions from the collateral pledging process,” according to SimCorp. “Operational improvements include short checks on collateral pledges and recalls, usability enhancements in the recently released Margin Manager and dashboards, and extended instrument support.”
- MiFID II Support
The upgrade also “completes SimCorp’s delivery of functionality to support MiFID II compliance,” officials say. The new functions provide integration across the front office and IBOR, offering “the workflows needed to establish automated T+1 Article 26 transaction reporting and real-time trade reporting via FIX. In addition, interfaces with trading venues have been updated to offer compliance with MiFID II’s order record keeping requirements,” officials say.
SimCorp officials say that they invest 20 percent of the vendor’s annual revenue into research and development. They also update SimCorp Dimension twice per year and the next version of SimCorp Dimension will be released in August 2018, officials say.
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