Varianza Supports Continued Portfolio Growth by Integrating the BRITech Platform
Varianza is an asset management firm founded in 2016 with the core business of discretionary portfolio management with third-party mutual funds. The company also manages collective investment schemes that invest in stocks, bonds and derivatives-direct investment. Varianza currently manages €600 million AUM.
At a Glance
When facing pressure to support portfolio growth with a portfolio management system already struggling with integration challenges and product developments that fell short of expectations, Varianza decided to move beyond those limitations with a new platform that could meet their demanding needs.
ABOUT VARIANZA
Varianza is an asset management firm founded in 2016 with the core business of discretionary portfolio management with third-party mutual funds. The company also manages collective investment schemes that invest in stocks, bonds and derivatives–direct investment. Varianza currently manages €600 million AUM.
BENEFITS
• Manage all kinds of assets, not only mutual funds but also stocks, bonds, derivatives and also private equity funds
• Manage non-financial assets, important for consolidation purposes
• Have more data to support analyzing portfolios, allowing them to make more data available to their clients
• See all data in one place, including CRM data
• Save time and reduce error by being fully-integrated with custodians and brokers which means manual inputs are reduced to the minimum and mistakes are less likely to happen
• Gain be!er control over portfolios with BRITech’s integrated
• Rebalance and Reconciliation modules
• Consolidate 70-80% of their regulatory reporting with data coming from BRITech.
Details (An Interview with Pablo Garcia Drake)
We sat down with Pablo Garcia Drake, Varianza COO, to discuss the challenges they faced as a company and how their specific goals and needs led them to BRITech and a successful outcome.
What obstacles were you facing before you found the BRITech solution?
“Well, we had a system in place that was mainly focused on mutual funds and client reporting, but it was weak with regard to other assets and integrations with other parties. And in addition, we noticed that new developments that we had requested ended up not meeting our expectations in terms of both quality and delivery times. Over time, these issues combined to eventually prompt us to look for alternate solutions that might be able to cover a bigger scope.”
How did you approach finding the right solution for your needs?
“We made quite a long list of vendors to take through due diligence which included most of the usual suspects of the industry as well as a few new players that we had heard about. From that list, we ended up contacting a total of eight firms and analyzed the IT aspects of each of them. We also compared those with the system we were currently working with at that time because we wanted to have a better understanding of the implications that the change would have. And it was essential that we carefully decided on the right choice because we didn’t have too many resources to face a new implementation.”
What made BRITech rise to the top of the list of solution providers?
“Our due diligence process centered on several must-have elements, which BRITech could address.”
1. BRITech’s independent net asset value calculation methodology.
“First of all, we liked that the system calculated the net asset value of the portfolio independently, rather than just reading data from custodians or external sources, which is the standard among most providers. This gives us more control and separation from custodians to ensure our client service in any situation.”
2. BRITech’s capability to support regional requirements for mutual funds.
“The second requirement was that the system had to be able to handle Spanish mutual fund Traspasos. That is something BRITech, as a global organization, knows very well. There are unique requirements accessing mutual funds in Spanish and, as I mentioned before, most of our business is based on mutual funds. So, we needed the Spanish Traspasos to be handled by the system. That was a ‘no go’ condition which BRITech was easily able to accommodate.”
3. BRITech’s full reporting customization capability.
“The third essential requirement was that the system had to generate the client report the way we needed it done. It had to not only have our look and feel, but also the content and data that we were requiring, especially when it comes to performance asset allocation with a uniform look through all the funds and also risk metrics.”
4. BRITech’s easy integration with our clients’ sources of information.
“The last, but not least, requirement was that the system had to be fully-integrated with a number of custodians, at least four (4) to start with on our list. In our case, we wanted to increase our connections in Spain and add two more in Luxembourg. And we needed full integration with them for reconciliation purposes and for market providers like for mutual funds, trading or dealing and also Bloomberg for stocks, bonds and derivatives trading. In the end, we had a total of six (6) integrations to support. And again, BRITech was able to handle this for us.”
What was the final evaluation and selection process?
“We first needed a demo as you might expect. And only two candidates reached the final test phase. We didn’t have enough resources to support 4-5 demos. It would have been too long and most of the candidates were out of the competition by then because they didn’t meet our basic requirements. We chose to run finalist demos in parallel so that we had a clearer picture of the differences between them. Through this approach, we considered not only the technologies but also very importantly the vendor company cultures and teams. With BRITech, we reached the point in which we felt like we same goals: grow together and improve the system with developments that make sense. For all of these reasons, BRITech became the natural choice.”
Tell us about the implementation.
“Implementation was nice; it was fast. We first worked closely with the BRITech team on the developments that we needed to do in order to round out the must-have functionality for us. It was key to spend some time in the definition of these items – one of the main points to make sure that the new functionalities met our expectations accurately. This early focus also eliminated the back and forth questions and issues that would have otherwise appeared, which saved a lot of valuable time. The longer time spent in the definition, the better, I’d say.
Development on these items took a bit longer than expected, as is common on these types of projects, but nothing too serious considering the time frames – and we were really ambitious in our timeline. Once completed, we then faced initial setup of the system and the data migration.
Here again, we spent quality time carefully gathering and reviewing the data that we had in our former system because we had around four years of activity for over 100 portfolios, so we had a fair amount of data there. In order to avoid inconsistencies in the data, we turned to the BRITech implementation team which was key at this point. They assisted us in adapting all the data that we had to the different upload templates that the BRITech system has, which was invaluable and resulted in a smooth deployment in the end.
We ran the old system and BRITech in parallel for three months. But in June 2020, we disconnected the old one and kept BRITech as our only OMS and portfolio management system, and, so far so good! We have been live for one year now.”
What benefit has BRITech delivered to Varianza and its customers?
“The most important benefit for us would be that it allows us to manage all kinds of assets, not only mutual funds but also stocks, bonds, derivatives and also private equity funds — and even non-financial assets which are quite important to us for consolidation purposes.
Also, we now have more data to support analyzing the portfolios, which means that we can make more data available to our clients through the website or the mobile applications. We have, by the way, received very good feedback from our investor clients too on our new client report, which is — in my humble opinion – state-of-the-art.
And having all the data — including CRM data — inside the system in one place is invaluable.
By being fully-integrated with custodians and brokers, we’re saving lot of time because manual inputs are reduced to the minimum and the mistakes are less likely to happen.
We now have better control of our portfolios thanks to the rebalance and reconciliation modules. The portfolio consolidation capability is both extremely powerful and helpful.
We have a project this year (2021) to get even more data from BRITech to build our regulatory reporting. We estimate we’ll have around 70%-80% of our regulatory reporting based on data coming from BRITech by the end of the year.
So, in our view, we have a complete solution. Really good. We’re really, really happy ‘client-wise’!”
In hindsight, would you choose BRITech again?
“Of course! We only regret that we didn’t find it before, actually!”
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