United Asset Management (UAM) has licensed Vestek's performance measurement and attribution system, Portfolio Analyzer.
UAM is availing the system to its 40+ independently run investment management affiliates and its in-house proprietary funds. Since UAM serves as the holding group for these autonomous money managers, it chose Vestek over industry competitors Barra, FactSet and Russel, because Portfolio Analyzer resides at one data center that all the affiliates connect to via a T1 line.
"The main reason we went through Vestek was the ability to maintain a central database for all the holdings of the affiliates," explains Dean Freking, UAM senior product analyst. "I do a lot of the performance attribution work, so it was important that I can access the funds and analyze the funds in assistance to the affiliates and their fund marketing people without having to log on to each individual affiliates' site."
As senior product analyst, Freking will also monitor the use of the system and pass along recommendations back to Vestek so the vendor can better accommodate the needs of UAM's affiliates. "I have a screen that allows me to see how people are using the system, if they are using this spreadsheet or this icon, and I can see if there is something we need to expand on," Freking says. "I help Vestek better understand what we need."
It is this continual back and forth that made customer service also a high priority in UAM's search. Freking points out that Vestek has been highly responsive thus far, and he has had an easy time getting in touch with Vestek help representatives. "I think there are a lot of similarities between the many attribution softwares, and sometimes it comes down to the people at the company," he says. "I'm able to get a hold of somebody at Vestek no matter when I call. You can have the best product in the world, but if somebody isn't answering your questions, the product is useless to you."
Although he declines to specify the cost of the Portfolio Analyzer license, Freking explains that UAM was able to get a more attractive offer as a group than if each individual affiliate approached Vestek separately. "By being UAM as a whole, we offered a dollar amount we were willing to spend and asked what kind of discount we could get for total number of user I.D.'s."
All of UAM's affiliates are permitted to use the system, and Freking points out that many of them will use it in conjunction with other vendor-built or proprietary systems they may have in-house. UAM, in fact, promotes the use of more than one system, as suggested by the Association for Investment Management and Research (AIMR). Further, he admits that many of UAM's smaller affiliates, as is the case with many smaller money managers around the country, have never used a performance attribution system, and this gives them the opportunity to do so.
"Until recently, smaller money management firms had to decide how they would spend their IT dollars," he explains. "They asked what were their priorities for spending, and performance attribution was not always at the top of their list. Clients are becoming more savvy and are beginning to ask for this, and the firms need some help with it."
UAM's affiliates must first download the Performance Analyzer client application onto their desktops via a standard Web browser. Then, they can automatically upload the holding information found in their portfolio accounting systems to Vestek's data center.
Because each affiliate operates as an independent entity, with its own investment styles and clients, it was necessary that the Vestek system have a strong security and permissioning layer. Freking says he was impressed with the security component of Performance Analyzer, which allows certain users access to only certain data. "The individual firms can specify which user I.D.s get access to what funds, and each affiliate cannot look at another's holdings and performance," he says. "This way, they maintain that independence, but we retain the ability to act as one core company."
In total, UAM's affiliates and its proprietary funds manage $188 billion in assets.