Transforming an operational patchwork into a streamlined investment office

Summary

SEI has maintained a relationship since 2008 with a sovereign wealth fund (the Fund) with over £71 billion in assets under administration. This case study demonstrates how The Fund was able to utilise SEI’s unique capabilities, which are now part of the Enhanced CIO solution.

The Fund was looking for a way to streamline data aggregation, reporting and other operations for a complex portfolio of assets. The complex portfolio consisted of approximately 50% private equity and hedge fund positions across segregated accounts managed by up to 50 different investment managers. The Fund relied on its custodian to perform functions beyond its recordkeeping capabilities, such as data integrations and performance and risk analytics while allowing the Fund to maintain its Investment Office. In selecting SEI as a strategic partner, the Fund established a transparent set of books and records, as well as efficient data aggregation, reconciliation, performance analytics and reporting processes.

Challenge 

Prior to converting to SEI, the Fund relied on custodian data to create reporting; however, given the complexity of the portfolio, the custodian’s recordkeeping capabilities were not sufficient to meet the Fund’s needs. The Fund held over 900 positions, with approximately 50% comprised of private equity and hedge fund positions across segregated accounts held by up to 50 managers, creating challenges in data aggregation and reporting. Specifically, processing the private equity and hedge fund positions required manual work, placing a burden on the Investment Office and creating challenges in data aggregation and gaining transparency across multiple accounts and products.

The Fund wanted to maintain its Investment Office, but needed a partner with expertise in portfolio accounting, data integrations and performance and risk analytics that could allow the Investment Office to focus on setting and managing its investment strategy and asset allocation, rather than being overwhelmed by day-to-day operations.

Solution

At the onset of the Fund’s strategic partnership with SEI, SEI built processes and data feeds between the custodian and investment managers to create an independent set of books and records from which performance and risk analytics could flow. SEI maintains the data in its portfolio accounting software, performing daily reconciliation of cash, positions and transactions between the custodian, investment managers and SEI’s security master. This daily reconciliation can ensure accurate data feeds into the reporting platform, SEI’s web-based dashboard. The Fund can also access up-to-date and reconciled information on a daily basis through the dashboard. Additionally, SEI empowers the Investment Office to meet their goals with quality, single-source data through two custom data feeds to populate their in-house systems with the same data SEI uses.

From an operational standpoint, SEI also provides daily support of the Fund’s private equity and hedge fund assets by processing capital calls, partner statements and distribution statements from fund administrators. Through SEI’s solution, the Fund can leverage SEI as a single contact point to consolidate multiple vendors and technology such as custody, data aggregation, risk and performance analytics, reporting and document management, to simplify the operational interface the Fund relies on.

In addition to the data integrations and the downstream benefits resulting from reconciled data, the Fund leverages SEI’s dedicated client service team for ad hoc reporting support. This creates operational efficiency for the Investment Office, allowing them to pursue their investment objectives and maintain a long-term focus on their portfolio.

Conclusion

Through SEI’s solution the Fund was able to simplify operations across its complex portfolio and bridge the gap between multiple investment managers and the custodian. Relying on SEI’s infrastructure to build connections between vendors allows the Fund’s internal Investment Office to leverage a single point of contact for its data, risk and performance analytics and reporting needs, and create a reconciled set of books and records across multiple investment managers. This allowed the investment office to focus where their expertise lies–in managing the asset allocation and investment strategy.

Important Information

This is a marketing communication.

This case study describes the attributes of a specific client that SEI has determined is comparable based on objective criteria, including organisational goals, asset size, and required services. Any discussion of specific services is intended to help clients understand SEI’s customised approach to providing certain enhanced CIO services. The information expressed herein represents the current, good faith views of SEI at the time of original publication, and has not been updated.

This webpage is issued and approved by SEI Investments (Europe) Ltd (“SIEL”) 1st Floor, Alphabeta, 14-18 Finsbury Square, London EC2A 1BR. This webpage and its contents are directed only at persons who have been categorised by SIEL as a Professional Client, for the purposes of the FCA Conduct of Business Sourcebook. SIEL is authorised and regulated by the Financial Conduct Authority. SEI Investments (Europe) Ltd ("SIEL") is the distributor of the SEI Irish UCITS Funds (“Funds”) and also serves an investment manager and/or fiduciary manager for clients who invest all or a portion of their assets in such Funds. SIEL provides the distribution and placing agency services to the Funds by appointment from its associate, the manager of the Funds, namely SEI Investments Global, Limited, a company incorporated in Ireland (“Manager”). The Manager has in turn appointed another associate, as investment adviser to the Funds, namely SEI Investments Management Corporation ("SIMC"), a US corporation organised under the laws of Delaware and overseen by the US federal securities regulator. SIMC provides investment management and advisory services to the Funds. Any reference in this webpage to any SEI Funds should not be construed as a recommendation to buy or sell these securities or to engage in any related investment management services. Recipients of this information who intend to apply for shares in any SEI Fund are reminded that any such application must be made solely on the basis of the information contained in the Prospectus (which includes a schedule of fees and charges and maximum commission available).Commissions and incentives may be paid and if so, would be included in the overall costs. Please refer to our latest Prospectus (which includes information in relation to the use of derivatives and the risks associated with the use of derivative instruments), Key Investor Information Document, Summary of UCITS Shareholder rights (which includes a summary of the rights that shareholders of our funds have) and the latest Annual or Semi-Annual Reports for more information on our funds, which can be located at Fund Documents (https://seic.com/en-gb/fund-documents). And you should read the terms and conditions contained in the Prospectus (including the risk factors) before making any investment decision. While considerable care has been taken to ensure the information contained within this webpage is accurate and up-to-date and complies with relevant legislation and regulations, no warranty is given and no representation is made as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information or any action taken on the basis of this information. You should read all the investment information and details on the funds before making investment choices. If you are in any doubt about whether or how to invest, you should seek independent advice before making any decisions. Past performance does not predict future returns. Investments in SEI funds are generally medium to long-term investments. The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested.