Dresdner Gestion Follows Its Own Portfolio Management Path
The left hand and the right hand operate independently. Simple enough. No metaphor more appropriately explains the varying IT selection processes taken by the many offices of international money managers. Despite the use of DST International’s portfolio management system, HiPortfolio/2, by various divisions within Dresdner Global Investors, Dresdner RCM Gestion, the French site, has opted for Décalog’s IDÉE.
The firm just completed installing the core portfolio management component of Décalog’s IDÉE, and is beginning installation of the application suite’s various modules, including IDÉE Trader, IDÉE Compliance and IDÉE Performance. The firm, which spent over 10 months of 1999 installing IDÉE’s core functionality, is beginning to port its client portfolios from the proprietary system that is being replaced.
Dresdner Gestion began looking for a new system in March of 1998 when it was deemed that its own in-house system could not be rearchitected to handle the euro currency. Early on, the French investment manager considered HiPortfolio/2, a system used by Dresdner’s San Francisco outfit, but Michel Haski, Dresdner’s ceo, says that it was not a system suited to the French market and to the security types that it manages.
“We were looking at DST HiPortfolio because Dresdner, in some other countries, are using DST, but very rapidly we realized their product would not adapt to the types of instruments we are dealing with in France,” Haski explains. “We manage short-term instruments, money market instruments and swaps. HiPortfolio is a product, I think, for equity managers, and in France we are mostly fixed-income managers.”
After nixing DST, Dresdner also reviewed ApiPortfolio, a system sold by French vendor Systeme D’Information Patrimoniale (SIP), but Dresdner ultimately chose Décalog because of its extensive history selling portfolio management and trading systems in France.
“I think as far as the products are concerned, they are quite similar,” admits Haski, explaining the decision to go with Décalog over SIP. “The definitive factors that made us choose Décalog were, I think, the fact that the product seems to be mature and reliable. More users are using this product in France, and what we heard from them was reassuring.”
As Dresdner begins to install the trading, compliance and performance modules, it is also considering a performance system by Santa Monica, Calif.-based Wilshire Associates to replace IDÉE Performance. Haski says that the Wilshire system is used by a number of other Dresdner groups around the world—San Francisco and Frankfurt included—and its parent organization would prefer if all the groups were on one system so that the performance numbers for the many Dresdner divisions could be compared in like terms.
“It is helpful to be on one system because we have a central team which compares performance for all products from different locations,” he explains. “It’s easier if every one of us could talk the same language and use the same concepts to analyze the performance.”
The firm should make a decision on the Wilshire system by May, with the installation expected to be completed well before the end of 2000.
The most difficult part of the installation was developing and testing the interfaces between IDÉE and the firm’s portfolio accounting system, Global Portfolio 2 from SunGard Finance, and its custodian, Credit Lyonnais.
Dresdner has signed with Décalog for 25 users, 17 of which are fund managers, the rest traders, risk managers and compliance personnel. As Dresdner is effectively leasing the use of the system from DST, it will pay about $150,000 a year for four years. Haski admits that while the system itself is relatively inexpensive, the implementation and maintenance costs are quite hefty.
“If the system costs ‘one,’ then implementation costs are something like ‘three’ or ‘four’ or ‘five’,” he jokes.
A spokeswoman for Décalog insists that the ratio between service costs and license costs are “very specific” to Dresdner, since it is a much smaller installation than the 150 to 200 user licenses that the vendor typically signs.
“The price of IDÉE depends on the number of users and the number of modules that the client chooses,” the spokeswoman says. “In the case of AXA Financial or Citibank, which are between 100 and 200 users, we employ a ratio of ‘one’ for cost and ‘one’ for license.”
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