In today’s existential predicament of the Investment Management industry, very few managers have been able to bolster their assets. However, most of the investment managers miss the opportunity due to the industry’s competitive nature. The same challenge was with an asset manager.
The client is a global investment management firm, focuses on collateralised loan obligations (CLOs) and US senior secured leveraged loans. Established in 2001 and located in New York, the firm manages approximately US$9 billion in CLO AUM. Since its inception, the client has issued more than 30 CLOs and Deutsche Bank Trust Company Americas has acted as trustee and collateral administrator to each of these.
The Business Challenge
The investment manager, in a yield-driven and highly competitive environment for asset managers, faces the challenge of scaling up its business as efficiently as possible. Compared with their legacy vintage CLOs, which had fewer and larger position sizes, generally in the US$1-$2 million range, their today’s CLOs have positions as small as US$100,000, altering the entire composition of their CLOs.
These changes in portfolio construction led to a noteworthy increase in all related activity including trading volumes, wire receipt and remittance, asset attribute tracking and asset servicing. These changes also confronted the client with two dimensions of growth, both in the number of portfolios managed and the intensity of work involved with each portfolio. So, compelled by industry fee compression, it is apparent that asset managers require solutions that have the ability to scale and control in order to achieve their growth aspirations.
The Solution: The Investment Management Firm Finds Deutsche Bank
To meet the investment manager’s challenges, the Structured Credit Services team from Deutsche Bank teamed up with the client in order to streamline and automate the exchange of information. By leveraging Cash Book’s dynamic reporting generation features, Deutsche Bank automated the nightly delivery of custom data files to the client through SSH File Transfer Protocol.
In turn, the investment manager has developed an automated reconciliation software that consumes Deutsche Bank’s custom data files, and automatically identifies discrepancies between both the bank’s and the client’s data. Supported by a best-in-class service team, this exchange and reconciliation cycle offers the client with a single point of contact for all inquiries related to the transaction.
Leveraging Deutsche Bank’s solutions, the investment management firm able to leverage the bank’s technology through automation to boost its efficiency without the need for additional resources. The bank also enabled the client to focus more on growing their business and adapt to the ever-changing investment landscape.