FinEx Capital Management LLP is an integrated asset management business providing a full spectrum of investment solutions, including hedge funds, private equity investments, Exchange Traded Funds (ETFs). The small but growing London-based ETF business comprises about a dozen ETFs with assets under one billion.
FinEx had been using Charles River software to manage their ETF portfolio. They had found the company to be somewhat inflexible and unresponsive in terms of support and requests for enhancements. Charles River also charged a consulting rate every time something in the application needed fixing or changing.
Furthermore, the software was not specialised in ETFs and had difficulties coping with a number of key business requirements such as:
- Index changes
- Portfolio rebalances
- PCF creation and bursting
When Martin Bednall, Managing Director, learnt that ex- colleagues at Barclays Global Investors, Jon Rushman and Sean Kelly, who had been instrumental in architecting the BGI iShares software, had developed the new, cloud-based Ryedale software he knew he had to evaluate it. This evaluation led to a project to replace Charles River with the Ryedale Platform.
Ryedale Implemented the Index Portfolio Management, ETF and Order Management modules in a Managed Service.
After an initial proof of concept project, work began on integrating index vendors, fund accountants, price sources, futures brokers and electronic trading venues. Once this phase was completed and any functionality gaps had been closed, the system was paralleled for 2 months before acceptance and go-live.
The project to replace Charles River with the Ryedale Platform took in 6 months in total. £50k in annual licence fees have been saved along with there being no additional consulting costs.
The time that Portfolio managers spend on checking and correcting the opening portfolio has been reduced drastically and has allowed more time to be spent on analysis and portfolio management.
System downtime has been reduced.
Issues have been addressed quickly and enhancements are responded to regularly and for no charge.
The Managed Service solution includes Ryedale support team performing an early morning daily review of each ETF. The review includes checking that:
- The data loads from the various data sources have completed correctly.
- The fund and cash positions in the IBOR reconcile with the fund accountant.
- Corporate actions have been applied correctly to indices and positions.
- The portfolio values and weights are within expected ranges.
A strong and collaborative working relationship has developed between Ryedale and FinEx. Ryedale have made it a priority to understand FinEx’s business processes in depth and there is an open dialogue on product development and direction.