The use of outsourced data technology from various providers in an open-architecture environment will become more prevalent, especially in the wealth management space, according to David Simpson, the long-standing regional director of FactSet in Australia. He has recruited James Savage as a new sales specialist.
Savage, whose previous role was as a business development manager at Franklin Templeton, has spent most of his career in funds management sales. However, he was actually sent to Australia from Boston by State Street in 1990 to head up performance measurement at its Sydney securities servicing office. He knows his way around data systems and fund performance measurement and reporting.
Simpson said last week: he said: “People want open systems, they want choice.” He said a lot of big clients would white label the best technology from different providers and put a wrapper around it. He tipped that the wealth space, which was a little “behind the times”, would adopt this approach.
“Data is expensive and scalable,” he said. “We have about 2500 people in Manila and another 2500 in India collecting data. If in-house systems fall over it tends to be because of data management. The more sophisticated funds are getting more complicated in their choice of investments and therefore more complicated in their use of analytics.”
Savage will be concentrating on marketing the FactSet Vermilion Reporting Suite, which offers client reporting and communications, and other enterprise reporting solutions. He believes “empowered reporting” to the end investor – “the client’s client” – is a big growth opportunity.
FactSet, which has been acquisitive globally in recent years, bought Vermilion Software in November 2016 and then followed up with the purchase of BISAM Technologies in March this year. BISAM provides portfolio performance and attribution, multi-asset risk, GIPS composites management and reporting.
BISAM is particularly attractive for big institutional investors who want to insource their compliant performance measurement away from their custodians.
Simpson says that FactSet has become even more of a technology and analytics company in recent years. Its recent acquisitions have all been technology companies. He believes that the traditional “data terminal” business has become a commodity and is a shrinking market.
“People don’t want a terminal,” he says. “Ten years ago, they used to want at home what they could get at work. Now they want at work what they can get at home, in their app space.”
Simpson has been with FactSet for 19 years, opening the Sydney office with the help of one of the Americans who had been working out of the fledgling Tokyo office but was due to go home to California.
“I opened the office and we got more interest more quickly than we expected,” Simpson says. “So, they convinced Phil Snow to spend six months in Sydney helping me out.” Snow is now the global chief executive, based in the Connecticut head office.
FactSet has more than 150 clients in Australia – mostly super funds and fund managers. It has about 50 staff in Sydney and 15 in Melbourne. Simpson estimates that the firm would be recruiting another eight or nine staff over the next 12-or-so months.
It has recently extended its relationship with Link Group to provide integrated broker estimates of stocks for clients of Link’s Orient Capital subsidiary. FactSet had previously provided Orient clients with global share ownership information.
Coincidentally, FactSet has also had a long relationship with White Outsourcing, the funds administration company, which was acquired by Link late last year. It is now called Link Fund Solutions.
Greg Bright is publisher of Investor Strategy News (Australia)