Whether it is ESG, the growing need for more frequent private asset reporting and more, investors expect the fund industry to provide clear, accurate information. Internally, fund managers want precise, timely updates of their positions and market trends to enable them to maximise returns and minimise risk. Regulatory demands continue to grow in major and subtle ways, often requiring funds to rethink their systems and the data they need to achieve compliance.
Too often, they have to completely reshape processes with each new challenge. Whether it’s a fresh reporting requirement, small but significant tweaks to the regulatory technical standards, or market changes, this can necessitate substantial change. For example, not later than the beginning of last year, the fund industry had to adjust to updates in the PRIIP’s regulation. Brexit is leading to UK regulations diverging in subtly different ways from the EU, causing a headache for international managers seeking to serve the whole European market. UCITS VI and AIFMD II are on the horizon.
Data mining and AI applications offer enormous potential to improve returns and the information flow for investors, as well as adding efficiency to internal processes. Yet even more than the effort of designing and building these systems, they require reliable data inputs to deliver genuine insight.
Mr Mantrisi believes meeting these diverse challenges is to large extent reliant on having a solid foundation of high-quality data. “Too often, valuable data exists in processing silos built to differing standards,” he said. “This makes it harder than it should be to meet new demands by sharing data between applications, and it limits the ability to run quality cross-checks.”
“This was certainly the case with us at Kneip. For most of our 30-year history, we reacted in response to each new fund industry regulatory compliance demand,” he said. Whether it was UCITS KIIDs, PRIIPs KIDs, AIFMD reporting, ESG disclosures and so on, each challenge tended to be met in a piecemeal fashion.
“We realised we needed to overhaul our IT approach, and so we have created a single system and database which gives us greater flexibility and helps us to verify, harmonise and enrich the data we have,” said Mr Mantrisi. When in 2022, Kneip was integrated into the Deutsche Börse group to become the finance data hub within Clearstream Fund Services, this gave the firm access to insight of the behaviour of hundreds of asset managers.
Their database features static data points typically found in a prospectus, such as the investment policy, fees, the name of the custodian, and so on. Then, there is the performance data represented in NAVs, AuM, TNAs and the like, corporate actions information, and ESG data. Market data on subscription and redemption transactions adds further context and insight.
This data is gathered and stored in a harmonised fashion, facilitating coherence checks and more frequent updates. From this, Kneip can build the precise reports demanded by clients, including greater ability to measure a range of KPIs against industry benchmarks.
“We are now a data driven company, no longer output driven,” said Mr Mantrisi. “This enables us to focus more on the fundamental task of collecting and checking data from multiple sources. We do not impose any market standards on how this is done, just structuring the data so that we and clients can work with it in the most efficient manner possible.”
To find out more, visit our