Client Testimonials

PPM America Gains from Deploying
Electra Reconciliation and Electra Data

 

Headquartered in Chicago, PPM America (PPMA) was founded in 1990 to manage internal institutional insurance mandates for the corporate affiliates of its parent company, Prudential plc, one of the top 25 global active managers.  Today, PPMA manages institutional and retail accounts across fixed income, public and private equity, and commercial real estate related asset classes.

In 2003, the team responsible for supporting the portfolio analytics and management of the public fixed income specific business was tasked with automating the error-prone manual reconciliation process that was being performed on spreadsheets.  Led by David Grzesiak, Vice President of Securities Operations, the group sought to improve their efficiency and accuracy by moving to a dedicated reconciliations software solution that would identify exceptions, streamline the data acquisition process, and allow them to focus on more value added activities.  When considering the right platform to integrate with their portfolio accounting system, PORTIA, and centralized data warehouse, David was mainly looking for functionality, flexibility and, in particular, the ability to set their own matching criteria, such as by custodian bank, account and securities type.  He wanted to be able to fine-tune the criteria as they went along, and as the company grew.    The platform he ultimately selected was Electra Reconciliation, along with Electra Data a service for acquiring data from custodian banks.

Fast forwarding to today, David’s group now automatically integrates and reconciles externally provided data from 12 custodians.  PPM America has more than doubled in size since the reconciliation automation project was initiated.  The automation of the reconciliation and exceptions management process as well as the time savings from the automated data acquisition from multiple custodians supported this growth.  The data is ready for the team prior to their arrival in the office, and they have been totally relieved of the manual process of acquiring custodian files (since this is done by Electra Data).  PPMA reconciles transactions, holdings and cash on a daily basis, and their time is now spent purely on resolving the exceptions as identified by the automated reconciliation process.   By fine-tuning matching criteria for their holdings reconciliation, they have achieved a daily match rate of almost 99%.

A robust audit check and supervisory review and sign-off process has been implemented using Electra Reconciliation.  And they now have more time to analyze and resolve the underlying causes of exceptions so that they are resolved quickly.

The automated reconciliation process has also benefited other areas in the firm. A proprietary cash management and projection tool has been developed and leverages the data already being collected via Electra Data.  This allows the team to provide more accurate, timely and forward-looking trading cash balances, useful to the investment team.  The group has also been able to focus more attention on how to better streamline the process flow of information that is being sent to their internal clients.  For example, the automation allows PPM’s operations team to respond quickly to a variety of ad hoc requests from the front office.

David stresses that the functionality of Electra Reconciliation has been honed to such a degree that his confidence in the accuracy of the numbers and data that go to the investment team on a daily basis has never been higher.  Additionally, and of equal importance to him and his group is the exceptional customer service provided by the Electra team.  They understand the time criticality of his business, and the communication flow between the teams is continuous.

Client quote:

“The automation has allowed the analysts to do more value-added types of work. The reconciliation process should be the minimum of where they spend their time if things are set up properly.”

“The system works.  As important for us is the really great support we get from Electra. The Electra team responds immediately to inquiries and is especially helpful in troubleshooting. From a people perspective, Electra is an outstanding and dedicated supplier.”

— David Grzesiak, Vice President, Securities Operations

 

Globeflex Capital Leverages Electra Reconciliation with Electra Data

 

Client quote:

Electra was selected as it offered a best practice reconciliation solution, Electra Reconciliation, with enhanced processing scalability, pre-configured rules-based matching, and Electra Data, a streamlined solution for gathering third-party custodian information.

We were able to leverage the Electra solutions to create an efficient account reconciliation method which produces timely reporting throughout the cycle. Additionally, the digitization of the reconciliation process has significantly shortened the reconciliation timeline, tightened controls and increased the productivity of reconcilers by allowing more time for exception resolution.

The Electra solution has enhanced reporting capabilities along with a dashboard that offers greater transparency and advanced tracking capabilities. The solution enables a user to view all components of the reconciliation, from account details, account balances, transaction and positions as well as substantiating documents on exceptions. It offers complete visibility for all users ensuring they know at what stage each account reconciliation stands through a single dashboard.

Operational risk management has been strengthened through an automated reconciliation process that is applied daily at the account balance, position and transaction levels.

With an established working relationship, we were confident Electra could deliver on their promises and stand up to a significant amount of testing while meeting an aggressive go-live deadline.

We’ve now been a client for over 11 years and the relationship remains strong. Electra keeps us well informed, continuously innovating and adding functionality.  Electra provides information on the latest versions which allows us to take advantage of the latest enhancements as our business requirements change and evolve. 

— Tammy L. Johnson, Head of Investment Operations/Partner, Globeflex Capital L.P.

 

Electra Data an Integral Component
to BMO Global Asset Management’s IBOR

 

Following the acquisitions of two registered investment advisory businesses in 2011, Bank of Montreal (BMO) rebranded the combined group as BMO Global Asset Management. Combining these businesses, however, proved to be more complex than a simple change of name. Bringing the firms’ core systems together – including equity, fixed-income and cash management services – forced BMO to implement an IT overhaul that would eventually develop into an investment book of record (IBOR), streamlining the accounting system, the performance system, and settlement process across a single platform.

Leading this implementation was Todd Healy, Chicago-based vice president and head of investment operations at BMO Global Asset Management. What Todd realized during his search for a new system was that regardless of the strength of the technology behind its IBOR, there was still a heavy reliance upon downloading third-party custodian information and manually uploading it into BMO’s system. To solve this problem, and maximize the efficiency of the newly installed IBOR, Todd turned to Electra and its custodian reconciliation data collection service Electra Data (previously known as Electra ReCollect).

Electra Data assisted in gathering third-party custodial information from hundreds of custodians, replacing the painstaking manual process previously in place. With a streamlined data flow and consistent format between the custodians, SimCorp Dimensions IBOR and BMO, the firm realized significant gains in client onboarding and overall data flow efficiency.

The improved IBOR data flow may aid the firm’s settlement process as well. BMO is currently reviewing how it can function more efficiently with straight-through-processing, eliminating as many manual touch points as possible.

Following the successful deployment of the IBOR and upgrade to Electra Data, a firm official stated it has helped grow the fund family by 40 percent and enabled BMO Global Asset Management to onboard three to four separately managed account (SMA) clients per week.

Client quote:

“In our new business process, we don’t have to focus on who the custodian is. We simply work with Electra.  They’ve already got interfaces with literally hundreds of custodians whose data they can add to the daily files we’re receiving from them. We’re not having to program and develop an interface for every single custodian that comes onboard, we simply rely on Electra to normalize that data and send it to us in a consistent format.”

Todd Healy, BMO Global Asset Management (As stated in FTF News)

 

Pzena Investment Management Turn to Electra Reconciliation and Data Yields Benefits

 

When Pzena Investment Management transitioned to Electra Information System’s reconciliation platform in 2004, it enabled the firm to both reduce errors and increase efficiency. Today, with more than $17 billion assets under management for corporate, public and individual clients, Pzena continues to reap those benefits as it has expanded its business around the world.

Pzena operations and administration manager and Principal Evan Fire, said the New York-based firm was in no hurry to rush into a new reconciliation platform when it transitioned from a manual system to automation in 2004. The deliberate approach was taken because the equities-only, deep value investment manager had been accustomed to manually reconciling portfolios and using Excel spreadsheets. For instance, staffers were clarifying positions and reports by manually checking bank and accounting statements – a painstakingly time consuming exercise.

But then the firm started to expand, and began seeking vendors to help automate its reconciliation process. Electra was the perfect partner for the firm.

Pzena selected the Electra Reconciliation platform and the Electra Data offerings, the staged rollout occurred over seven months, as the firm chose a strategic go-slow approach. As it was a new technology being introduced to the infrastructure, there was a significant amount of testing that was done ahead of the go-live.

One of the first steps was implementing Electra Data to deliver files that enabled the firm to check its portfolio data against the information provided by its custodian banks. Fire noted this to be “invaluable” because he would prefer to deal with the company’s own internal issues than having to deal with the banks several times a day to reconcile any issues. Further, Electra Data eliminated the need for a staff member to monitor the process and make certain that the firm is getting that data in the format it needs.

Additionally, Electra Reconciliation has automated the matching process so Pzena can focus on the exceptions. Through the past decade, Pzena has continued to evolve its reconciliation system, which has grown along with Electra.

Pzena currently has a half dozen staff members that heavily use Electra Reconciliation. Fire said that without the solution, the firm would most likely need at least a dozen people to manually perform the reconciliation.

Pzena currently has a half dozen staff members that heavily use Electra Reconciliation. Fire said that without the solution, the firm would most likely need at least a dozen people to manually perform the reconciliation.

Client quote:

“At this point, I would say that 98% of accounts are receiving automated feeds…Anytime you can minimize the human touch and allow a computer to say that it has matched 40 out of 50 transactions, and you only have to look at 10 things to figure out what might be an issue, you’re going to minimize the human error component.”

– Evan Fire, Pzena Investment Management (As stated in FTF News)

 

AQR Capital Spells Relief E-L-E-C-T-R-A

 

In order to improve its reconciliations capabilities, Applied Quantitative Research Capital (AQR) decided to upgrade its primarily manual legacy – primarily manual – reconciliation system, which relied largely on manual processes. The Greenwich, Conn.-based hedge fund turned to Electra Information Systems for help.

When it launched in 1998, AQR, a hedge fund which utilizes in depth research as a driver for its alternative and traditional investment products, had more than $1 billion in commitments, making it the largest hedge fund start-up at the time. And it continues to grow, as today it has nearly $80 billion under management—an increase of more than $50 billion in the last three years.

But that same growth was also being stifled by its manual reconciliation systems. AQR Vice President, Matthew Baglio, knew the next steps to take.

He brought in a handful of technology firms to show off their electronic wares, but in the end it was the Electra’s Reconciliation platform that won over the firm, as it was deemed the best solution to handle AQR’s high volumes, as well as new, global regulations that were leading most firms to examine their reconciliation processes. Electra Reconciliation also offered the ability for AQR to customize the platform according to its specific needs as the company continued to grow.

AQR was also able to improve its portfolio analysis by creating a “managerial metrics” application on top of the Electra Reconciliation platform so that it could examine various trends and better manage its counterparty needs.

As an example, AQR was able to move a staff member formerly focusing on reconciliations to work with portfolios in a more holistic manner—functions like performance, valuations, subscriptions, redemptions and the overall pricing of the portfolio.

AQR is currently in the process of migrating from the fourth version of Electra Reconciliation to the platform’s fifth iteration, which includes several major enhancements improving the flexibility of the application, allowing for user-defined workflow and exception-defined processing; support for exchange-traded derivatives, including futures, options and commodities; a new business-intelligence layer that allows users to look at metrics and key performance indicators around the reconciliation process; and a four-fold or five-fold improvement in performance when it comes to matching speeds.

 Client quote:

“When you have a technology platform where you can reduce the operational cost, you’re able to reallocate those bodies that were focusing on reconciliations to do different functions outside of recons.” 

– Matthew Baglio, AQR (As stated in Waters Technology)