A Digital Upgrade for DPM Rebalancing

Financial services is a sector that is particularly intensive in its use of technology. According to Gartner, the influential research and advisory house, banking and investment businesses will spend almost USD 600 billion on enterprise technology in 2021 alone – for comparison, the entire economy of Singapore generates USD 374bn each year with Hong Kong at USD 369bn. At the same time, we are also witnessing a global surge of investment in fintech firms. Given these high levels of technology spend, you could be forgiven for thinking that digital transformation was nearing its end game in the industry. There remain however operational areas that are yet to feel the touch of automation and digitalization. In many investment firms offering Discretionary Portfolio Management (DPM) servicing, the rebalancing of portfolio is one such instance where manual processes reign even today.

Portfolio rebalancing is, of course, a positive and vital task for DPM teams. As time and markets evolve, it’s important that individual client accounts reflect the latest investment recommendations.

The challenges of rebalancing

Tracking that portfolios are aligned is a straightforward exercise, but implementing the changes needed to rebalance portfolios is less so.

First of all there are the challenges around managing fund settlement times, which can range from one to 10 days (a duration which seems incomprehensible in the digital age, and for which customers have little patience). Delay also entails the risk that the market moves decisively while rebalancing is in progress leaving customer portfolios in limbo until the process is complete. Explaining to your customer that they can’t sell or buy specific assets because their portfolio is in the middle of a rebalancing is not a great foundation for a productive relationship.

From a commercial perspective, the process as it stands in many organisations is wasteful and inefficient. With rebalancing being carried out manually, one big issue is that it is all but impossible to scale operations. If financial institutions are to ramp up their DPM capabilities and make them available to more customers, they need systems that can support rebalancing across hundreds of thousands of portfolios or more.

A better way of rebalancing

Modern technology can eliminate much of the fuss and complexity of portfolio rebalancing by automating the process. It provides the quickest, most productive route to the desired end state. And it can be carried out at scale rather than account by account or in some other piecemeal fashion.

For financial institutions that pride themselves on the quality and personalisation of their services, technology provides a platform for shaping a superior customer experience – for instance, with improved reporting, analytics and access to portfolio and performance data at any time, any place and on any device.

What to look for in DPM rebalancing technology

Once a portfolio has veered away too far from the model, there are a number of options for rebalancing it and bringing it back to a healthy state. Technology offers a wider range of options for achieving this goal too. It may be that we just need to replace one instrument with another; and yet some systems are unable to cater for this fine tuning. Instead, everything gets traded to deliver the model portfolio.

Ideally, DPM services would be able to take into account the various investment objectives, weigh their importance against each other and arrive at the optimal solution. This is a straightforward exercise for an algorithm.

At Quantifeed, our rebalancing engine can determine the best set of trades by optimizing across a range of factors, including the recommended model allocation vs. the customer’s portfolio, the size of any cash position and the portfolio manager’s tactical priorities. This can be overlayed by the customer’s investment preferences; for example, if they have a focus on ESG, or particular exclusion due to ethical or religious reasons.

Being able to rebalance portfolios using this lighter touch but with greater precision means that portfolio managers and their customers can capitalise on market opportunities more quickly than with the traditional rebalancing process. Supported by technology, DPM teams can be quicker on their feet when it comes to taking profit from gains and moving into less risky assets.

And just as importantly, working in this way is more in line with customer expectations. Customers don’t want to know the ins and outs of rebalancing. They just want to set the direction and trust their financial institution to deliver on their wealth management goals.

DPM Rebalancing – an easy win for digital transformation programmes

Digital transformation has, understandably, become one of the great business buzzwords of the modern age. And the vast scope of the term can present financial service providers with a bewildering range of competing priorities – all of which explain to some degree the vast sums currently being spent in the sector on technology.

In that context, putting an end to manual rebalancing and introducing technology to do the job constitutes an easy win. It delivers immediate productivity gains and lays down a DPM platform for future growth. Running quietly and efficiently in the background, DPM rebalancing technology gets on with optimising customer portfolios while embedding straight through processing into new operational areas. It readies DPM providers to scale their business, deliver stronger performance and, most importantly, improve customer experience.

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    Ross Milward

    Chief Technology Officer &

    Ross Milward leads Quantifeed’s technology and engineering efforts to deliver innovative digital wealth management solutions. Before co-founding Quantifeed, he spent more than 15 years in investment banking, holding senior positions in equity and equity derivatives technology.

    His expertise is in developing and managing large-scale enterprise-level global trading and risk systems. A former managing director, Ross has worked for Bank of America Merrill Lynch and Deutsche Bank. He has held multiple global and regional leadership roles, most recently as head of equities technology in Asia. He has worked in Hong Kong, Sydney and London.

    Ross holds a Bachelor’s degree in Computer Science with Honours and is a Fellow of the Securities Institute of Australia. He likes pushing his limits through long distance triathlon races.

    Michael McDonald

    Head of Web Engineering

    Michael McDonald builds Quantifeed’s online wealth management web application in order to deliver a user-friendly and integrated experience. Michael has over 11 years of experience in web application development.

    As Developer for Crossroads Hong Kong, he and his team set up the infrastructure for its donation and stock management application. As Developer at e-commerce company Synapse Connect in New Zealand, he and his team helped clients build mobile applications like prospersoftware.nz, providing him with a full-stack web development and DevOps skillset, servicing clients and back-office operations.

    Michael holds a Bachelor degree in Electrical and Computing Engineering from University of Canterbury New Zealand. He moved to Hong Kong in 2014 and enjoys the outdoors sports such as hiking and cycling.

    Joy Sun

    Head of Quantitative Engineering

    Joy steers Quantifeed’s research and development in systematic investment strategies, portfolio construction and trade execution. Prior to joining Quantifeed, she worked as a quantitative analyst in asset management and proprietary trading firms.

    She led development of trading strategies, including design,simulation and risk control, and research in market trend recognition and prediction. Joy earned her PhD in Operations Research from the University of Hong Kong, her MS in Statistics from Nan Kai University and her BS in Computational Mathematics from Dalian University of Technology.

    John Threlfall

    Head of Site Reliability Engineering

    John leads the SRE team in Singapore and is responsible for the overall infrastructure and SDLC of Quantifeed’s technology platform, QEngine. He ensures the design, availability, and reliability meets the requirements of both our internal and external users. He has over 20 years’ experience in the banking industry, with a demonstrated history in transforming back-office technology and developing reliable engineering systems for large financial institutions.

    Prior to joining Quantifeed, John held technical and leadership roles at Bank of America Merrill Lynch and Standard Chartered Bank. He holds a BSc degree in Artificial Intelligence from The University of Manchester in the United Kingdom. John moved to Singapore in 2008 and enjoys travelling with his family, football and scuba diving.

    Lars Bischoff

    Head of Core Engineering 

    Lars Bischoff is a lead senior software engineer on Quantifeed’s back-end services, with a focus on trading and external interfaces.

    Before joining Quantifeed, Lars had a number of leadership roles across major investment banks including Deutsche Bank, JP Morgan, UBS, and Citi. These roles included designing and implementing systems for Equities and Equity Derivatives Trading. Lars also held roles as country lead for Equities and Equity Derivatives Technology, as well as global lead for Equity Derivatives Trading.

    As a former Executive Director in Deutsche Bank and JP Morgan, Lars has extensive experience in building local and global development teams. In this capacity, he also defined and realised the technology direction and innovative platforms in the Equity and Equity Derivatives space for these two organisations. Lars holds a Bachelor of Science degree in Computer Science, from Macquarie University, Sydney.

    Chetan Shetty

    Head of Product Management

    Chetan leads Quantifeed’s product management capability and drives the implementation of features in our product that continuously solve digital wealth management problems for our clients.

    Chetan started his career as a software engineer in the aerospace industry working across the entire software development lifecycle. Subsequently he worked in various roles helping large enterprises in Hong Kong solve business problems with process and technology solutions. His experience ranges across aviation, insurance, public sector services and consulting. He has lived and worked across multiple countries and enjoys travelling to new places, tasting new cuisines and occasionally writing his blogs.

    Eric Lee

    Singapore Country Head & Head of Program Management

    Eric Lee leads the Singapore team in managing the delivery process to key regional clients such as DBS Singapore.

    Eric has held leadership roles throughout the capital markets technology domain in Morgan Stanley, Merrill Lynch, and Bank of America. He has worked extensively as the technology leader covering a broad set of functionality including  portfolio order management, equities, and electronic trading. Eric has worked around the world in locations such as Tokyo, London, New York City, and Hong Kong. He is currently based in Singapore.

    Eric has a Bachelor’s degree in Computer Science from the Columbia University School of Engineering and Applied Sciences.

    Conor Doyle

    Head of Pre-Sales

    Conor has over 20 years of experience of leading sales and service teams in high-growth financial software vendor organisations. His previous work experience focuses on leading multinational, cross-functional teams in the provision of leading-edge, highly complex and high-value fintech business solutions.

    Conor is an expert presenter, negotiator, and business operations manager; able to forge solid relationships with both clients and partners and build consensus across multiple organisational levels. He has demonstrated capacity for leadership and project management, with proven track record of meeting targets, overcoming challenges in real time, and delivering tangible results.

    Conor is bilingual (English and Japanese) with strong technical and integration experience and a Mechanical Engineering degree.

    Robert Rice

    Chief Sales Officer

    Robert Rice leads Quantifeed’s sales strategy and works with clients to define and deliver digital wealth management solutions. Based in Hong Kong for over 15 years, Robert has held sales leadership roles in APAC and EMEA at London Stock Exchange Group (formerly Refinitiv), Fitch Solutions, OFX and SNL Financial, leading teams servicing wealth managers, asset managers and financial institutions.

    His career is focused on brining innovative platforms, products and solutions to market helping clients meet their objectives. Robert is an appointed Mentor for the Hong Kong Fintech Week advising start-ups and market entrants on various topics and go to market initiatives.

    Audrey Wong

    Chief Operating Officer &
    Chief Financial Officer

    Audrey Wong manages operations and financial affairs to deliver on Quantifeed’s business strategy. Audrey joined Quantifeed from Bank of America Merrill Lynch, where she was COO for the equities division in Asia Pacific. Audrey’s tenure at Merrill Lynch included senior assignments in Toronto and New York, before relocating to Hong Kong in 2006 to take a new role as the Finance Head of Equities Derivatives for APR.

    Her responsibilities expanded to CFO of APAC Equities in 2011 and CFO for APAC Global Markets in 2013. Audrey holds a Bachelor of Business Administration from Brock University of Ontario. She is also a Chartered Professional Accountant of Ontario and Chartered Financial Analyst. Audrey enjoys biking and swimming with her two children.

    John Robson

    Chief Commercial Officer

    John Robson drives Quantifeed’s client partnerships. He works with financial institutions to assist them in developing their digital wealth management future. Based in Hong Kong for over 30 years, he has held regional leadership roles at JP Morgan, Nomura and Merrill Lynch managing teams which serviced the region’s consumer and private banks.

    His career has been focused on the development of investment platforms and products. He has been instrumental in introducing significant product innovation to wealth management platforms in Hong Kong, London and Tokyo.

    Alex Ypsilanti

    Chief Executive Officer &

    Alex Ypsilanti spearheads Quantifeed’s mission to solve the challenges of digital wealth management.

    Before co-founding Quantifeed, he spent fifteen years as an investment banking research analyst. His work enabled investors to improve their risk-adjusted returns and to gain access to a wider range of market strategies and risk premia. Alex, a top ranked analyst by Institutional Investor, had a leading role in the growth of the European ETF market, hedge fund replication and the use of volatility products in portfolios.

    A former managing director for Morgan Stanley and Bank of America Merrill Lynch, Alex has built and led teams of derivatives and quantitative strategists in London, Tokyo and Hong Kong.

    Alex holds Bachelors and Masters degrees in Information Systems Engineering and a PhD in Mathematical Finance from Imperial College, University of London.