Automating asset management - without abandoning Excel

In this age of information, how do asset managers find the rare analytical gems that set their strategy apart? Flexible, sophisticated analytics are key to competitive edge: tracking your firm’s past decisions, incorporating market fluctuations and auto-aggregating diverse and disparate data sources.

Our asset management clients tend to manage their share positions and shape investment strategy based on myriad Excel valuation models. With Excel remaining the natural place to input and calculate current and possible investment metrics, analytics evolution by no means involves leaving Excel behind. However, Excel does inherently present some areas for improvement. Difficulties extracting insights from disparate data and complex-to-interpret calculations and functions, for example, mean asset managers are seeking ways to enhance how they will leverage their Excel backbone going forward.

QuantSpark takes a creative approach to this for our asset manager clients, building bespoke solutions that evolve — rather than interfere with or replace — their business-critical Excel models. Overall, complementing our clients’ existing qualitative expertise in market dynamics with the edge-enhancing analytics they’re seeking.

Asset management: Aligning existing architecture with data-driven vision

Our team is experienced in working with leading investors and asset managers, overseeing portfolios with market-leading returns. While our clients may be initially unsure of the concrete, technological next steps to take, they do tend to already have an ambitious vision of their automated, data-driven future:

1. Evolving core architecture

Thoughtfully designed analytics and software can simply build on trusted Excel foundations, avoiding disruptive change to technical ways of working and ensuring business-critical functions are safeguarded. To put this into practical terms, key benefits include:

Organising and structuring disparate data: Tailored analytics and software enable disintermediating Excels, saving investment teams time that is currently spent disentangling calculations and functions.

Risking Excel for more resilient strategic processes: As input metrics increase, so too does the likelihood of Excels becoming somewhat impenetrable for users, as well as producing errors. This can be avoided by overlaying sophisticated analytics, which we work with clients to introduce such that they flow seamlessly with day-to-day ways of working.

2. Enhancing tracking capability

Tracking data at the point of decision ensures asset managers can meet regulatory requirements but, from an analytical standpoint, there are deeper insights to be gained. With data captures only weekly, for example, clients may also potentially miss interesting or outlier market events that are key to adaptive modelling.

As such, asset managers have much to win from enhanced tracking of historical decision-making, extracting greater utility from past events to strategically evolve investment models. With tailored analytics and software solutions, previously dispersed Excel sources can be rapidly aggregated to generate pertinent multi-source insights. This enables agile, near real-time analysis, without affecting investment teams’ established data input methods.

3. Reducing manual, time-consuming tasks

Often, asset managers find themselves pouring time and energy into manually collating Excel data, which naturally presents an unavoidable risk of error. Even senior team members may see their time diverted from investment decision-making to, for example, unifying core data for annual reports. Crucial to gauging portfolio performance, this repeat analysis would ideally be delivered instantaneously. Likewise, regular tasks such as capturing and backdating stock splits.

Enhancing existing Excel processes with tailored automation works to minimise both overall risk of error and such time-consuming, repetitive manual tasks. Implementing these automations begins with ensuring the underlying data sources are compatible, laying the groundwork for our clients to later introduce and benefit from leading-edge algorithms.

4. Maintaining successful, established ways of working

With complex Excel models critical to daily business, we know that asset managers require a solution that will aid, rather than replace, their teams’ current approaches. As a result, we often work to engineer solutions to extract valuation data, store it in a centralised database and enable enhanced analysis and data visualisation. Maintaining clients’ core Excel models, and without requiring input time from employees.

The QuantSpark approach: Creating analytical assistants designed for existing ways of working

Our team’s adaptive approach and grasp of asset managers’ needs, methods and internal cultures have positioned us to create tailored analytical assistants that integrate almost unnoticed into our clients’ ways of working.

Full-scope analytics, under one hood

We’ve previously presented one such solution as a user-friendly web application built using Next.js (an open-source development framework). This enables a client’s team to simply click in to access the resources for all its analytics needs. Built utilising AWS cloud infrastructure, including our centralised Amazon Redshift data warehouse, and managed end-to-end by the QuantSpark team, this type of solution enables:

• Data refreshes every 30 minutes
• Instant report generation using updated Excel data
• Rapid dashboarding via PowerBI integration

Clients are also able to pull data available in PowerBI (sourced from the Redshift data warehouse) directly to Excel using PowerQuery, with no need for downloads.

• Live data input feeds for multiple financial data source providers (Bloomberg, Charles River, etc.
• Improved data quality monitoring, via applying automated data validation logic to every metric reported
• Reducing client need to manually update large Excel spreadsheets and PowerPoint decks on a daily basis, through consolidating all data sources
• Instantly extracting the data required for audits

Avoiding time spent locating and gathering this exact data; via a centralised data warehouse, client teams can easily query per metric and time period to extract the required data in the right format, circumventing the need to request input, verifications, etc. from multiple colleagues.

• More robust and innovative processes, with minimised human error
  
  

A seamless aide

Designed around teams’ core Excels, our asset management solutions enhance utility, speed and strategic innovation without disrupting established routines or focus on investment-related activity. They work in the background to enhance quality assurance and modelling via automated data checks, without impacting day-to-day trading or forcing clients’ key performers to alter their working methods.

For example, we’re able to create logic to auto-notify clients’ relevant team members if issues are detected with specific metrics, or a market event stands out as unusual given established metric thresholds. This enables awareness of issues and key market changes as they happen, leading to accelerated investigation and faster, enhanced investment decisions.

Vitally, whereas accessing updated portfolio data may have previously involved requesting refreshed Excel and PDF files from a single colleague, our solutions also ensure clients’ entire investment teams have data access at the touch of a button.

Enhancing ESG reporting

Sustainability and ESG reporting are priorities for our asset management clients. With ESG experiencing major EU regulatory increases, evolving approaches to analysing relatively straightforward — yet often irregular and dispersed — data is particularly crucial. We’ll continue supporting our clients in this field to aggregate multi-source data across providers and rankings, and, vitally, to visualise it in formats useful for the business.

For example, compliance with the Sustainable Finance Disclosure Regulation (SFDR) requires asset management firms to rapidly provide relevant data. To enable this for existing clients, we’ve identified the relevant data sources and built corresponding API integrations into the centralised data warehouses that we’d previously created for them. As a result, clients are primed to extract the necessary (audit) data, within the timeframes required.

In addition, our work to integrate ESG data with financial metric data primes opportunities for our clients to benefit from advanced analytics across these various data sets. This paves the way toward identifying correlations, investigating their causes and identifying previously unseen links between formerly disparate data, to drive clients’ investment strategy evolution.

Regular communication

Seeking client involvement and rolling feedback is a hallmark of our method at QuantSpark, enabling us to create bespoke solutions that prime niche competitive advantage. We look to set up highly productive, iterative collaboration with clients, integrated as their teams’ first point of call for any data science queries. Combining remote and on-site collaboration, we work to become clients’ embedded data and analytics partner; a trusted and true part of their team.

The results: Seamless adoption for immediate analytical edge

Our asset management analytics solutions have seen enthusiastic uptake from launch, with clients highlighting their ease of use. We’ve witnessed the ability to explore near real-time data, with valuable visualisations and innovative analysis capabilities at their fingertips, become a game-changer for all seniority levels within our clients’ organisations. For asset managers in particular, gaining novel resources for delivering stand-out competitive analysis to higher-ups has proved to be a key win.

Ready to build on existing Excel processes?

We take an end-to-end approach at QuantSpark, guiding our clients from the first stage of purpose-built data warehousing right through to their end-goal analytics. To talk through your firm’s specific requirements, don’t hesitate to contact our team.