Monthly Archives: July 2016

Legacy Systems: Vendor Consolidation a Catalyst to Obsolescence

Vendor M&A typically comes with promises of synergies and added value, though recent history suggests it can also shorten the runway that leads to a legacy system

Dan St. Onge, Chief Operating Officer, Eagle Investment Systems

Over the past 30 months, technology-focused investment bank Hampleton Partners has tallied 596 acquisitions in the financial technology sector, with 75% of the activity involving either enterprise software or enterprise services companies. Parallel to the escalating deal volume has been a significant bump in valuations, as the median purchase multiple has grown from 12x EBITDA in 2013 to 15x EBITDA last year. While many in the industry may be inclined to celebrate this activity as a coming of age for financial technology, for clients – when their vendor is acquired – it’s often a signal that their relationship is about to undergo an abrupt and significant change.

Consider, for instance, the announced retirement of the Barclays POINT risk analytics platform. Barclays sold the platform in December, and soon after Barclays POINT users were informed the new buyer was only interested in the IP and would be shuttering the POINT platform within 18 months. According to a Citisoft survey, 80% of users now plan to initiate a process to find a new vendor.

Read More…

Transitioning to a New Global Industry Classification Standards Structure

Helping clients make a seamless transition as sector classifications undergo re-alignment.

Greg Mello, Head of Product Management

Sometimes small changes create big headaches. Take the recent decision by MSCI and Standard & Poor’s to alter the Global Industry Classification Standard, or GICS®. While the update may seem relatively mundane, particularly compared to the heavy lifting that came out of Dodd-Frank and other financial reform efforts, the fact is, for those operating internal systems or still running dated platforms, it is these small changes that often best highlight the challenges of working with a legacy system.

MSCI and Standard & Poor’s created GICS® in 1999 to provide a consistent industry classification system for companies around the world. As part of the announced changes, all listed equity Real Estate Investment Trusts (REITs) as well as real estate management and development companies—with the exception of mortgage REITS—will be promoted to their own real estate sector. Currently, these companies are being classified as financials.

This re-alignment is an acknowledgement that institutional investors now view global real estate as a distinct asset class. With interest rates at record lows, real estate has become a key source of yield and diversification, and has grown considerably in terms of market capitalization. In an effort to encourage the development of new real estate investment products, the industry believes the GICS® reclassification will further support the demand for REITs. Besides improving the visibility of the sector, it should also lower volatility by reducing the correlation of real estate to riskier financials.

Read More…

European Thought Leadership Events Surface the Latest Data Trends in Performance and Risk Analysis

Antony Slee, European Sales Director

Eagle is currently co-hosting a series of roundtable events across Europe with performance measurement professionals at leading asset management firms. The discussions have revealed a number of recurring issues that demonstrate how universal the limitations of legacy systems can be.

Several recurring themes are surfacing from these roundtable discussions, highlighting a consistent requirement for flexible and scalable data management and performance measurement platforms. The emerging themes are:

  • Increasing investment complexity
  • Need for complete and accurate data
  • Inconsistency of reporting
  • Increased frequency of reporting
  • Need for scalable solutions

These themes appear to be true for all investment management firms—regardless of size, geographic location or asset mix—as they meet changing market conditions and focus on meeting business objectives.

Read More…

 Scroll to top