Hey Due Diligence, Knock Knock…
John Davis (Investment Officer): Once I get through aggregating
all information from managers in excel, I’ll run an analysis
and will come back with thoughtful suggestions. But before that,
I have to go over my inbox and daily monitoring of the portfolio.
Technology: Knock, knock. May I come in? I have two
gifts with me, data and decision analytics :)
Sorting through emails, pouring over documents, extracting information out of documents in internal systems, follow-ups with colleagues and investment partners, verifications and reference checks, reporting for end clients or investment committee…the list just goes on. This is business as usual, with the VIX is say at 11 and no new funds are launched. This leaves little time to reflect on investment decisions, running ad-hoc analysis or forming a thoughtful investment thesis.
Gerald Jackson (Director of IR Operations): Once we wrap up the
RFP for New State Pensions, I’ll get started on Modern Fund of
Funds and World consulting firm database request. All are similar,
yet different. So we can’t just copy and paste, or else the output
will be of poor quality, and needs coordination with compliance
Technology: Knock, knock. Will you let us in? I come
bearing gifts along with my friends (data and decision analytics) :).
Biggest pain-points that investor services / IR operations team face are in three areas:
John and Susan from Investor town, and Mary and Gerald from Manager city are cautiously optimistic….
What does the due-diligence of future look like? Given the increase in data volume as well as limitations on budgets, technology has the ability to scale limited resources and play a key role in helping both investors and managers meet their fiduciary responsibility.
External Collaboration: Communicate more openly with investment mangers. Utilize technology to clarify misconceptions of the manager’s process, synthesize views on manager comparisons and relay possibly negative news or conclusions can facilitate communication and ease the pain of not wanting to hurt anyone’s feelings.
A technologist would say: Bilateral interaction, mutualized infrastructure
Managers, when armed with the perception of their products, can not only hone the marketing material and presentations that they give, but improve their internal process accordingly. Increased flow of information between both parties can help to mitigate misinformation, improve relationships and facilitate communication throughout the industry.
A psychologist would say: Human learning, and relationship building
Inviting technology into the due diligence process would serve to automate inefficiencies and allow for better, more informed investment decisions, faster. You hear technology knocking. You gonna answer the door?