Provider of investment management solutions SimCorp announces the introduction of its new cloud-native performance attribution solution, developed to meet the growing demand for accurate and real-time performance analytics.
This innovative service is the inaugural offering under SimCorp’s Investment Analytics Platform, providing investors with the capability to swiftly calculate performance attribution in real-time and on the fly. This marks the next evolution of SimCorp’s long-standing performance offering.
Historically, calculating performance attribution figures has been an operationally heavy and time-consuming process. In effect, portfolio managers previously had to wait until well into the trading hours to obtain reliable performance metrics. However, advancements in cloud computing are changing this situation, enabling accurate and reliable performance measurement from the moment they start working in the morning.
"In today's complex and fast-paced investment landscape, real-time performance attribution can provide transparency and clarity regarding the drivers of financial returns, particularly in portfolio construction and active risk management. Our new investment analytics service enables users to perform advanced investment performance analytics on the fly, with calculations delivered in just a few seconds,” says Lars Ole Hansen, Global Product Manager at SimCorp.
Transaction-based design ensures accuracy
SimCorp's front-to-back investment management platform establishes an unmatched foundation for performance measurement and attribution across all asset classes, including within alternatives.
A performance attribution solution is a framework for the deconstruction of returns and attributing them to various factors, such as asset allocation and security selection. Performance attribution helps investment managers assess the effectiveness of their investment strategy, whether it's active, passive, or smart-beta with style factor tilting.
By deconstructing portfolio performance into its smaller components, investment managers can showcase their expertise to demonstrate their value proposition to both new and existing investors.
Unlike many other performance systems in the market that face challenges in achieving full accuracy, SimCorp's solution is inherently transaction-based.
"By leveraging the data stored within the SimCorp investment management platform and encompassing all asset classes, we secure the highest levels of accuracy and transparency. This design ensures that all assets and transactions are in the same system, meaning that users won’t have to manually pull data from multiple sources to determine the underlying exposures," says Lars Ole Hansen.
Cloud-native solution
The Investment Analytics Platform is a native cloud calculation service and is an integral part of SimCorp's open ecosystem, constructed on an API-first architecture. The modernized web frontend empowers end-users with fast, dynamic, and granular performance analytics.
“Traditionally, our performance attribution solution has been supplemented with other tools by front office analysts, necessitating the operation of multiple systems for portfolio analytics. With the introduction of our new Investment Analytics Platform, our clients will require just one system to accommodate all aspects of performance measurement and attribution. This consolidation can result in significant savings on additional licenses and reconciliation efforts,” says Lars Ole Hansen.
Performance analysts using the SimCorp platform will enhance their capability to delve deeper into the details of investment returns and manage performance rules to trigger alerts for single days when returns appear suspicious or when asset weights approach predefined thresholds.
For portfolio managers and client relationship managers, this service offers quick and flexible views of attribution factors and other success factors in their investments, which can enhance decision-making and communication with their investors.
"Releasing this initial service on the cloud-based Investment Analytics Platform underscores SimCorp's ongoing commitment to cloud transformation and reinforces our position as a technology-enabled service provider," says Hugues Chabanis, VP of Investments at SimCorp.
SimCorp will further expand its offerings under the Investment Analytics Platform by introducing solutions related to ESG attribution and risk attribution as the next set of services.