bchadwick, how large is your RIA? Fortigent provides an even more outsourced solution if you doing a lot of alts.
Bchad, I’ll shoot you that info later tonight.
Thanks! Unit.Root. We’re still a startup, so some family and friends with capital, plus partners (as someone who started life as an academic, my capital is sweat equity). My partner is a former prop trader who ran a global macro fund for about a decade until the 2008 crisis. I’ve been working with him since 2009 on developing a better portfolio construction methodology that basically blends tactical asset allocation approaches with more traditional discretionary macro trading. We’ve got a good product, but we need better back office systems in order to scale up and pass any reasonable due diligence. We can do it, but there’s not a lot of cash flow to fund it just yet. I looked at Fortigent after you mentioned it: it looks like it’s more geared to fund of funds, or am I missing something? We definitely want to be able to track our holdings, do attribution and performance analysis without having to do everything by hand (or excel), and be able to scale to separately managed accounts. We need to handle ETFs, Futures, Options on ETFs and Futures, and Spot FX.
The.Unit.Root - Appreciate sharing your thoughts. Starting at new job in Investment management and this will be one of the first projects I need to lead, helping the partners implement BD. So will have tons of questions once I start. If you have an email great. I can be reached at sachinkm at yahoo.
Hold that thought BChad. I just received this email from BD. Apparently they’re being sold to Advent… "Our Path to Greatness When I founded Black Diamond in 2003, it was based on the premise of helping advisors be great. In the eight years since, we have learned, grown and evolved, but our plan to be a great partner for advisors has never changed. We strive to be a highly valued, trusted partner of our clients by providing the best portfolio accounting and performance reporting solutions with the best people and the best service. Since bringing the platform to market in late 2005, we have grown our client base to 280 firms representing $75B in AUM and nearly 200,000 accounts. During this time, we have continually searched for ways to increase our positive impact on our clients, our culture and our community. Today, I am excited to announce that we have signed a definitive agreement to be acquired by Advent Software, the pioneer and leader in the financial software space. Advent has long been a company I have admired for its transformative impact on the industry and now global reach. However, when we were first approached by them about working together, we had questions about how Advent viewed the marketplace and what they were looking to provide advisors. The things we learned were striking. From my very first conversation with them it was clear that Advent’s leadership team is focused on doing the right things and delighting its clients. Based on this, we wanted to dig deeper and here’s what we found: 1. They have great people, extremely similar values and even similar beginnings. 2. They recognize the value of our platform and its power to help a practice grow, scale and attract new business. 3. Combining our efforts is the right solution for the advisory market and will leverage both companies’ strengths to provide the best solution possible. Personally, I see this as a chance for Black Diamond to take a big leap forward and am more excited than ever to continue the mission we started. Advent is looking to us to continue innovating and enhancing our platform, to develop for next generation devices and to further strengthen our culture of service and high performance for our clients. Black Diamond will remain an independent business group highly focused on the needs of the advisor. I will be leading the advisory strategy for Advent with the same values and principles that make Black Diamond what it is today – do the right things for the right reasons, the right way. Combining with Advent represents the opportunity to do more for advisors and accelerate our pace of innovation. Black Diamond exists to cultivate greatness for our advisors and that will not change. Both Advent and Black Diamond are committed to a seamless transition and emerging as a stronger, more agile solution for our advisors. This combination represents the next chapter in supporting advisors on their path to greatness and I am excited to take the next step. Reed Colley CEO and Founder For more information and to view a copy of the Press Release, visit www.blackdiamondreporting.com
Ahhh Advent. Somebody comes up with a superior product? Buy them. My first PMS was Portfolio 2000 back in 2000. Great windows-based product vastly superior to Advent’s. And Advent knew it. So they bought them with the promise they would continue supporting the product. Well, that lasted about 12 months and adios Portfolio 2000. We use Advent here (small cap, long-only shop) and if I could start from scratch, I would tell Advent to take a hike. But the back office is comfortable with the product so we take it in the arse every year and re-up with them. That includes their CRM Qube (which they inform us they are getting rid of - thanks guys) and Moxy, their trading software.
I’m trying out the M* Office software, really looks very good for the research/PM part, don’t know about accounting yet.
Bchad, just re-read your first post, you’re right on fortigent being more geared towards FoF. Astute, email is spruceholl@aol.com Here’s the latest communication on BD from Advent: Dear Black Diamond Clients, When we named Advent almost 30 years ago, we took two of our favorite words – adventure and invent – and melded them because they best captured the spirit of building a business at the intersection of finance and technology. The adventure certainly continues today with the excitement we all feel about our plan to acquire Black Diamond. Many of Advent’s very first clients were (like many of you) advisory firms looking to grow their businesses by harnessing the power of technology. Most of those firms are still our clients today and I’m proud that Advent has played a role in their success. The market has changed and grown dramatically in recent years, and with it, your technology needs. Over the past few years, Advent has invested significantly in innovating for alternative managers and asset managers, but we realized we needed to do more to support advisory firms. This acquisition represents our opportunity to accelerate our ability to help advisors be great with an innovative, purpose-built platform. Personally, I have greatly enjoyed getting to know the team at Black Diamond. From my first conversation with Reed and his team, it’s been clear that our core beliefs are remarkably similar and our values are completely aligned about what we believe is possible for this market. Reed and his management team will be in charge of Advent’s advisory strategy, and Black Diamond will become an independent business group within the Company led by Reed. From product development to client service to sales, the team you know will be the team that continues to develop and innovate on the Black Diamond platform. As part of the Advent family, Black Diamond will have access to additional expertise, technology and the resources to accelerate their growth and innovation. Advent is passionate about making our clients successful, and we share that passion with Black Diamond. Together, I believe Advent and Black Diamond can be an even better, faster, and stronger partner for you. Please let me know if you have any questions or concerns – we welcome your feedback; in fact, we’ve set up a blog at http://blogs.advent.com/executive-view and we invite you to join the conversation, or you can email me directly at stephaniedimarco@advent.com. In the meantime, thank you for the opportunity to work together. Stephanie DiMarco CEO and Founder
Palantir Wrote: ------------------------------------------------------- > I’m trying out the M* Office software, really > looks very good for the research/PM part, don’t > know about accounting yet. About to finish our two week eval period. Its impressive. Some fairly advanced reporting capabilities. Very expensive though.
we have M* office (just use it for research though) and its only ~$4,000 (have a discount through custodian). We looked at the price difference for all of principia vs. office and decided for the little bit extra, office was the way to go. The outsourced reconcilation might be expensive?
Advent will likely ruin (if not kill) BD.
Advent Software Buying Upstart Rival Black Diamond For $73 Million; Vows It’s Not Buying A Competitor To Kill It, Like It Did With TechFi Friday, May 13, 2011 06:35 Tags: Portfolio Management Software “TechFi was at a different time and a different management team is at Advent now,” Advent’s President Pete Hess said in an interview last night, hours after announcing the $73 million acquisition of upstart rival Black Diamond Reporting in a press release. Hess, along with Black Diamond’s founder Reed Colley and David Welling, its chief solutions officer, were understandably excited and upbeat when I interviewed them last night in a 9 p.m. conference call. But I felt compelled to be a complete killjoy, beginning the call by asking Hess if the purchase of Black Diamond would be a repeat performance of June 2002, when Advent bought TechFi only to kill its portfolio management software solutions within a few years. Hess was ready. “I can understand why people would be worried about that,” he said. The most infamous acquisition in the annals of advisor technology, the 2002 episode further fueled Advent’s reputation for corporate ruthlessness in an independent advisor industry dominated by entrepreneurial professionals. And the similarities between Advent’s purchase of Techfi back then and the Black Diamond acquisition now are remarkable. In June 2002, Advent bought Techfi for $23 million in cash, which put $12 million in the pocket of its young founder, Matt Abar, then 31. Yesterday’s transaction will make 34-year-old Colley extremely wealthy. While refusing to say exactly how much stock he owns in Black Diamond, Colley did say that, in addition to stock compensation to employees, the only other shareholders in Black Diamond are its original angel investors. Black Diamond has no strategic investors or venture capital investors. In another similarity, Advent, as I reported back then (in a magazine that has removed my byline from articles I wrote), said it planned to “keep alive TechFi’s product line targeted at independent advisors, and to nourish it.” Hess made the same kind of pronouncements yesterday about the Black Diamond deal. “Were completely committed to seeing Black Diamond be successful and Advent is 100% committed to the advisory space,” Hess said. Should you believe Advent this time? If you were unfortunate enough to be among the hundreds of advisory firms burned by Advent’s killing of Techfi’s Portfolio 2000 application and its online app, AdvisorMart, or just a bystander who witnessed other advisors being burned, should you trust Advent now? I may live to regret it, but I have to say I think you can trust Advent now. Hess is right and things are different this time. When Advent bought Techfi in 2002, revolution in software development was just getting under way. Tools developers could use to make writing software much easier were just beginning to have an effect on the advisor app market. Nearly a decade later, the software revolution that began back then is now flourishing. While there were only a few viable portfolio accounting and performance reporting apps available to advisors back then, now there are many. The A4A Review section lists more than a dozen PMS apps and a bunch of smaller players could be added. Software development so much easier than it was a decade ago. (That’s why app stores for phones have thousands of apps written by programmers from all over the world.) Advent can’t buy every upstart competitor that comes along. Though Black Diamond is being acquired, another startup software company will take its place in no time. A brilliant, energetic and entrepreneurial young engineer, perhaps one who worked at Black Diamond, will go out on his own and try to start the next Black Diamond. In addition, portfolio management software (PMS) applications used to be like roach motels: Advisors could get in one but could not get out. Converting from one program to another was a massive headache and expensive. That’s no longer true. Black Diamond runs on a Microsoft SQL database, as do many PMS apps. You can export that data and it is a lot more rational and standardized than the databases used by PMS apps a decade ago. If Advent jacks up prices on its Black Diamond clients, they’ll leave. So I believe Advent will empower Black Diamond and Colley. “After the transaction is complete,” says Advent’s press release, “which is expected to occur in the next several weeks, Black Diamond and its existing management team will lead the advisory strategy for Advent, operating as an independent business group within the Company.” Hess says Advent’s business is now divided into three discrete segments: hedge funds that use of Advent’s Geneva solution for accounting; money managers that use Advent Portfolio Exchange or Axys; and wealth managers that will use Black Diamond. Colley will become General Manager of the Black Diamond group, reporting to Hess. The strategy sounds pretty good, but the Black Diamond acquisition could be most consequential to the 3,000 firms using Advent’s flagship product, Axys. Axys is written in an ancient proprietary computer language from the 1980s, but Advent has been having a terrible time trying to replace Axys. Hess says Advent has “no plans to sunset Axys,” meaning it will not force Axys users to pay more money and jump to Black Diamond. But maintaining two systems targeted to advisors makes little sense and cannot last. Hess explains the evolution of Advent’s strategy by saying that Advent has transformed itself in the past decade. In the 1980s and 1990s, Advent only offered Axys. He says it attracted a mix of different types of clients. “Whether you were a hedge fund manager, advisor or institutional money manager, we put all comers on Axys,” says Hess. In 2003, after five years away from daily management, Advent’s founder Stephanie DiMarco, returned to the company after its stock had plunged and its business was reeling. Hess says DiMarco’s focus on creating separate a product for hedge fund managers was a breakthrough. “That strategy proved successful and that now accounts for a third of our business, and clients are thrilled that we are focus on their vertical,” says Hess. “Over time, we’ve gained an appreciation that the advisory business is a distinctively different business than asset management and hedge funds, and that’s what ultimately made us pick up the phone to call Reed.” About five years ago, Advent launched Advent Portfolio Exchange (APX) but that is too costly and complex for most Axys users. A web-based version of APX has been offered by Fidelity but I don’t know any advisory firms using it. Another version of APX, OnDemand (formerly Advent Back Office Solution), has 500 firms using it, Hess says. But APX has not provided a popular migration path from Axys and Advent commitment to the advisory firm segment has been questionable as it has become more vulnerable to the slew of new startups. Among the smaller PMS companies challenging Advent in the advisor business are AssetBook (started by a co-founder of Techfi), FinFolio (started by Abar), Oron Advisor Services, IAS, Morningstar Office and InData. All of these PMS companies have made inroads and, as a group, they pose a threat to Advent’s ability to hang onto its Axys clients. With the acquisition of Black Diamond, which is highly regarded, Advent now has a migration path to offer Axys users. Black Diamond’s reports are said to be slick, and the app is priced below APX. Black Diamond, Colley says, has 280 clients managing $75 billion on its platform. A web-based app, Black Diamond could allow Advent to provide advisors a solution more affordable than APX. And Advent does not risk hurting its APX business with institutional money managers by creating a no-frills version of APX. Does Advent’s strategy of making Black Diamond make sense to you? Hess says Advent bought Black Diamond “because we recognize an opportunity to grow in this space and also we feel obliged to our clients to help them grow their business and give them the right tool to grow their practice,” says Hess. I press Hess: Can advisors who got burned and saw Advent shut down Techfi believe you this time? “The best thing I can do is prove it,” he says. “We will prove it.” Do you believe him?
The.Unit.Root Wrote: ------------------------------------------------------- > we have M* office (just use it for research > though) and its only ~$4,000 (have a discount > through custodian). > > We looked at the price difference for all of > principia vs. office and decided for the little > bit extra, office was the way to go. > > The outsourced reconcilation might be expensive? WTF! Our annual reconciliation quote was more than that! Could you email me at recycler99 (at) gmail (dotz) com?
Interesting takes on M* office. We are having a rep here next week to give us a look at it.
recycler Wrote: ------------------------------------------------------- > Palantir Wrote: > -------------------------------------------------- > ----- > > I’m trying out the M* Office software, really > > looks very good for the research/PM part, don’t > > know about accounting yet. > > About to finish our two week eval period. Its > impressive. Some fairly advanced reporting > capabilities. Very expensive though. It is certainly more expensive than Pcenter, but it still fairly competitive at 5600/2 people. How much are you paying for your current service?
Portfolio Center is only half of what they market themselves as. Portfolio Center could not interface with Northern Trust. They lied to me about this. ALso, Portfolio Center cannot deal with foreign currency. So any assets deonominated in anything besides USD will need to be manually entered. Ended up with Advent. I agree that is it a pain in the a$$, but Advent’s support team is the BEST i have ever dealt with for anything. Once you understanding how Advent works it is easy. Seemless FX processing, as long as your getting the data feeds. Yes it is expensive, but it is worth it. Clients develop a deeper level of trust knowing you have complete accurate books and records.
#1 Gunner Wrote: ------------------------------------------------------- > Portfolio Center is only half of what they market > themselves as. Portfolio Center could not > interface with Northern Trust. They lied to me > about this. ALso, Portfolio Center cannot deal > with foreign currency. So any assets deonominated > in anything besides USD will need to be manually > entered. > > Ended up with Advent. I agree that is it a pain > in the a$$, but Advent’s support team is the BEST > i have ever dealt with for anything. Once you > understanding how Advent works it is easy. > Seemless FX processing, as long as your getting > the data feeds. > > Yes it is expensive, but it is worth it. > > Clients develop a deeper level of trust knowing > you have complete accurate books and records. If you can afford Advent Portfolio Exchange (APX), I would opt for that over Advent Axys. APX is SQL-based whereas Axys is flat-file based. It’s a TON easier to query the data in a database than relying on pre-packaged reports from Axys that has to reference flat files. APX scales a ton easier if you’re planning on growth. You can outrgrow Axys, but I don’t think you can really outgrow APX. Before I left my prior firm, we were in the process of converting to APX from Axys. You’re better off starting on APX from day 1 instead of converting at a later point. edit: not to mention, Advent has stopped developing anything new for Axys and are just in maintenance mode. All their new development on that front is for APX. My $0.02
According to a recent servey approximately 47% of emerging ($50 million or less in assets under management) RIA firms utilize a portfolio management and reporting system compared to approximately 80% of established ($50 million or more in assets under management) firms. The fact that over half of emerging-size investment advisory firms are not utilizing a PMR system may sound a bit surprising at first, but when the traditional cost of these systems is considered it seems that budget considerations force many smaller firms to make due without a PMR solution.
An accounting software manages your company’s financial instruments in a seamless processing interface, saving everything in one place, with real-time data available for performance analysis and reporting at all times. When you close periods, you can keep and maintain separate holdings frozen for previous periods, and you can recalculate or recreate previous period results based on the original holdings.
all of the funds I have worked at outsourced this stuff to fund admins. they have accounting software and our controller and CFO - BO - does the higher end checks in excel. Fund admins send out monthly performance reports and nav to investors.
I always thought that this stuff had to be independent or is that only for end of year audit purposes?