Managing Performance Measurement: Challenges, Structures, and Systems
Report Summary
Managing Performance Measurement: Challenges, Structures, and Systems
Buy-side firms are contending with rising demand for performance-related information across the full range of investment strategies and instruments.
Boston, November 29, 2011 – A new report from Aite Group examines how buy-side investment organizations manage their performance measurement function and infrastructure. Based on Aite Group interviews with 19 investment performance professionals, the report discusses the challenges faced by performance analysts as they strive to achieve their organizational goals.
Performance measurement is a fairly mature discipline that provides vital feedback on investment results to a firm’s senior management, investment decision-makers, and clients. The industry has a widely accepted set of principles—the Global Investment Performance Standards (GIPS®)—that reflect sound practices in the calculation and presentation of performance. Despite this, buy-side firms are contending with rising internal and external demand for meaningful performance-related information across the full range of investment strategies and instruments. Respondents described challenges in five broad areas: operations, methodologies, data management, systems, and client communications. The predominant issues are data quality, system flexibility, and systems integration. Many performance measurement departments are handicapped by operational inefficiencies and systems limitations, which hinder them from achieving their potential.
“Client reporting is a significant operational concern at many organizations,” says Philip Lawton, senior analyst with Aite Group and author of this report. “Performance measurement system vendors might well consider how to facilitate user production of high-quality performance reports in volume.”
The report names the following specialized investment performance measurement systems: Advent Software, Albridge, Base-Two Investment Systems, Broadridge, Charles River Development, Clearwater Analytics, Confluence, DST Global Solutions, Eagle Investment Systems, FactSet, First Rate, Fiserv, Informa Investment Solutions, InvestEdge, Morningstar, MPI (Markov Processes International), MSCI Barra, Odyssey Financial Technologies (Temenos), Ortec Finance, Penny (TKS Solutions LLC), PerTrac, Princeton Financial Systems, Private Edge Group (State Street), Rockit, SimCorp, SS&C, StatPro, SunGard, Thomson Reuters, Wilshire Analytics, and Zephyr Associates.
This 24-page Impact Report contains 10 figures and two tables. Clients of Aite Group’s Institutional Securities & Investments service can download the report.