Getting the technology right

Identifying the most relevant and appropriate systems and sources for information, data analyses and protection.

Single and multi-family offices alike must have robust information technology systems in place to effectively manage and monitor assets and performance. Multi-family offices in particular must meet stringent internal and external reporting requirements, to both regulatory bodies and to their clients. All the offices we spoke to draw on research and data from external providers alongside their own internal data analyses. Several have developed their own matrices for assessing ESG or negatively screening potential investments. Information from the likes of Bloomberg Professional provides valuable insight into investment trends and industry changes.

Third-party investment research, in-house research, and subscriptions are all important sources used to inform investment decisions and analyses at the Tsao Family Office in Singapore.

“As fund investors with a long-term investment horizon we trade with very low frequency. We use multiple sources of third-party investment research, we also run proprietary in-house research. Our portfolio and risk management is based on proprietary models and run pre and post trade,” says CEO/CIO Bryan Goh. “We are not high frequency traders."

“We gather qualitative and quantitative data from our investment managers for analysis, triangulation, and validation, and we subscribe to various databases, including Bloomberg. However, most data are a commodity. Our insights are derived from close collaboration with our investment managers, and prospective managers.”

Bryan Goh, CEO/CIO, Tsao Family Office

 

 

One of those focal areas for in-house research is ESG, which is a priority area for the Tsao Family Office and founder Dr Mary Ann Tsao describes as a “learning curve”.

“We've acquired more skill sets over time in terms of being able to assess the ESG component when we look at funds. We now have developed a matrix that will enable us to be satisfied whether or not a company or ESG fund we’re looking at meets our criteria,” says Dr Tsao.

Newswires, Bloomberg, bank research, fund research and “the network effect” are Maitri Asset Management’s go to sources of information for short- and long-term investment information gathering, intelligence, analysis and decision making.

“It’s important to look at all the sources that are out there. But we find that the network effect on the ground is pretty strong; when you speak to the real people on the ground who are running the businesses, you gain a much better sense of what's going on,” says non-family CEO Manish Tibrewal.

“We believe in digital first. So, with every process that we design, we ask, ‘Can we make it digital and seamless? How does it talk to our existing ecosystem? How do we make sure that it becomes very efficient to the end user?’”

Manish Tibrewal, CEO, Maitri Asset Management

Whether it is our mid-office, our back office, or our investment team. We also have consolidation tools because some of the investments may be spread over different platforms.”

The digital focus comes down to cost and efficiency, says Tibrewal. “We are very nimble in our digital set-up. We have access to data, long-term analytics, short-term analytics, and everything can be built in. Access can be either made available or restricted to whichever part of the team needs it, and different levels of approval can be implemented digitally. All these have been hugely important in the COVID environment, where not everyone comes into the office at the same time. Thankfully we were quick to act from day one, when the first lockdown happened, and so it was a very seamless process for us to move to remote working.”

Having the right technology in place to support and enable scale and, in the case of a multi-family office, to report effectively and accurately to clients, is vital, says Alexander Scott of Applerigg, who thinks that one of a multi-family office’s critical task is reporting to its clients.

“Being able to do that on an integrated basis is extremely difficult because the assets are likely to be with multiple custodians, managers and assets; some priced daily, some priced much less frequently. And bringing that all together to enable the underlying client to have a strategic view of their assets, risks and returns is a complex task. It has been and remains the holy grail of family office operations. The outcome needs to be simple, coherent, and user friendly. And that's very hard to do.”

Scott says that the growing importance of scale to a family office’s success, and the integral nature of technology to that ability to scale, is one of the reasons that the family sold Sandaire, its multi-family office, in 2020 and is continuing as a single-family office under Applerigg.

“We concluded that continuing to own and invest in a relatively small company in the financial services sector was an increasingly challenging position. To be able to deliver increasingly complex solutions to your clients you need substantive scale.”

A robust IT system with firewalls between client files and systems is essential at multi-family office Aglaia, which is responsible for the wealth of more than 30 families.

“We take a long-term view for each family at Aglaia in a bespoke manner. So, we need to ensure that each family structure is appropriate for every situation from the perspective of tax planning, intergenerational wealth transfer, investment priorities, and so on."

Heinrich Jessen, Co-founder, Aglaia

This necessitates our digital footprint to cater for clear delineation of custody, reporting and investments,” explains Jessen.






“We leverage the multi-family aspect in things like looking at interesting investments together. But in terms of guidelines and reporting and costs, every family has its own customized experience. And as that's very much separated from everybody else, it requires a very good IT system.”