In today's world we take technology and software progression for given and don't often pay much attention to how we got here. Only when we are faced with something that doesn't work, we might look for solutions. But rather than search the market and spend time on RPFs and implementing new software, would it be worth asking your existing vendor if they can build something for you? A couple of years ago SimCorp® went to market with a new offering - a development partnership program called Client Driven Development. This program offers clients of SCD to partner with the development team to build new stuff.
PenSam® in Denmark was looking to for a better solution to handle their growing alternative investments. So when they heard about SimCorp's new offering, they were quick to jump on board. Pensam partnered with SimCorp 18 months ago and are planning to go live with the new development in the coming weeks. Eager to learn more, we asked Thomas Anker from PenSam about their experience with SimCorp's development team around the new Alternative Investments module.
How many alternative investments do you have?
We have around 70 different investments and around 22% of our AUM is allocated in to the alternative investment space.
Why did you choose to do a partnership development with SimCorp?
A couple of years back when I was looking into the flow for handling alternative investments, it became pretty obvious to me that we didn’t have an efficient way of dealing with all the data collection and reporting on the backend of it. We’ve also struggled with doing proper (or at least timely) decomposition's of our AI portfolio, and needed a centralized platform for doing exactly that.
After seeing the presentation that SimCorp gave at IUCM 2015 in Copenhagen, I realized that SimCorp was building a solution that would solve a lot of the issues that we had about processing and using the data in an efficient manner. Essentially, they were working on building functionality to support a best practice workflow for handling alternative investments, and since this was the exact thing I was trying to achieve, I decided to get in touch with them to try and become a development partner, with the end goal of gaining insight and to influence the development, to make sure that it suited our needs.
Please explain the process of a development partnership
We signed the development partnership agreement in December 2016 and have been working together with SimCorp on the AI manager since then.
There are multiple development stages that we have gone through, and it all started out with us coming to SimCorp's headquarters to hear about their ideas for version 6.3 and to go through some drawings on their initial design. It is sort of a circular thing, since the development is ongoing and will expand into more advanced areas in future releases. The development process looks like this:
Design/data model approval
Prioritization of the development road-map for the requested functionality
Functional testing/case use, suggestions for improvements
The last three bullet points is where we put in a lot of hours.
How frequent have you met with SimCorp?
Sometimes every other month, and sometimes 3 times a month. It varied depending on the development stage.
How much effort (time) has there been on your end?
100’s of hours
Are you getting the workflows and functionality you wished for?
The coming release will pretty much only consist of an expansion of the static data model plus some added dashboard functionality which will allow for an easy representation of data directly in SCD. The main thing in 6.3 is that that we are getting our data stored on a centralized platform, which will allow for better and easier use of that data for reporting.
What has been most challenging?
Getting our internal processes and data collecting aligned with the "to-be" workflows.
Did you pay SimCorp to become a development partner?
We’ve paid them an initial fee for an open INS file which grants us access to all existing and upcoming functionality related to the AI manager. Other than that, the time spent during the development partnership is seen as an investment from both parties perspective.
When you go live in 6.3, what improvements do you expect?
A much broader data model, that will be able to hold all of our static data for the investments.
Dashboard functionality for viewing investment data across our AI portfolio, such as Total Commitment, Called capital, historical transactions, geography etc.
Where in the development stage are you currently at – what are you testing at the moment?
We’re expecting to go live with the new AI manager within 3 weeks or so, but once we are up and running, we will look further into decomposition and client valuations of underlying investments of Private equity funds.
Thomas Anker has worked with portfolio management for 10 years. Currently, as an Application Manager he provides buy-side support for development, testing and implementation and project management within SimCorp Dimension. Previously he worked for Nordea as a Support Specialist, and held numerous IT system support roles at Nykredit, where he joined the SimCorp Dimension implementation project, primarily responsible for managing configuration, testing and implementation, and training employees in the use of SimCorp Dimension for handling financial instruments and derivatives.
What are your favourite places to visit?
One of my best friends live in Salt Lake City, UT, which means that I usually go there at least once a year. The scenery and nature surrounding the city is quite spectacular, and there are so many things you can do all year round. Skiing and snowboarding in winter time, hiking, camping, climbing during summer time.
Your proudest SimCorp moment?
There are many, but the most recent one, was when I was invited to come speak “Northern Europe Executive Pension Roundtable” at SimCorp, about Pensam's Alternative investments and why we have chosen to engage with SimCorp in the development partnership, and what we hope to achieve by implementing the AI manager.
What do you love about SimCorp?
The sheer scale of the system is mindblowing, and the fact that you can tailor the functionality to practically solve any business related issue (sometimes with a bit of creativity), is what I love the most.
What is the most memorable book you’ve read?
I don’t actually read that much literature… the last book I read was called Choose yourself by James Altucher, which sort of plays on the “Rome was not build in a day” saying. But I read it at a time where I needed to shift my focus to long term, and other than being a funny read, it also had some ideas on how to achieve that.
If you could change anything with SimCorp what would that be?
Their pricing model currently favour's the big players rather than the small ones. More than often the cost to benefit of automation at a smaller company, such as the one I am working at, cannot justify an implementation, simply because costs are too high compared to trade volume.
What do you do in your spare time?
I guess the normal stuff like hanging out with friends and family etc. but since most of my day is spent either sitting or standing, I try and stay active with Crossfit, Badminton, Wakeboard, snowboard etc. in my spare time.. It very much depends on the weather and what I feel like doing that day. Other than that I volunteer at a homeless shelter, where I cook food with the young residents every other Thursday.
I’ve done that for almost two years now, and other than being very rewarding, it sort of puts your life in to perspective, allowing you to not get caught up in things that doesn’t matter.
Favourite meal you like to cook?
Any tapas style meal, where everything is put on the table for everyone to share. Cant tell what it would actually be, because is usually depends on what is in season.
Have your organization worked with SimCorp on other development projects? Did you experience the same benefits or did you face any challenges? Please share your experience with the user group.