Every asset management firm has different needs, so it’s vital to find an investment management solution that works for you! We are often appreciated for our transparency and our Investment Management Solution (IMS) may not be the right fit for everyone.
In this article, we shine the light on the specific functionalities of Limina IMS and when Limina IMS might not be the best match for your asset management firm.
Limina develops, delivers, and services an Investment Management System (Limina IMS) which spans the following functional areas:
- Order Management Capabilities
- Portfolio Management Capabilities
- Data Management & data quality controls
- Investment Book of Record
- Risk & Performance Attribution
- Pre- and post-trade Compliance
- Managed Integration Services
As former investment managers ourselves, we know that the choice of a (partner) vendor for these areas is an important and sometimes even daunting decision.
Furthermore, choosing an IMS vendor is not always a one-way street. In other words, just as you are looking for the right vendor to partner with, we as a vendor, are looking for the best-fit clients that will get the most value from our solutions and our partnership approach to client engagement.
In order to help you ascertain whether or not Limina is right for your business, let’s take a look at some of the most common reasons why managers might choose another investment management platform than Limina's.
1. Prefer the benefits of a large, established vendor
Limina is an emerging vendor that has been around for less than a decade. There are both pros and cons for asset managers working with emerging (small in relative terms) vendors and established (large) vendors. As with everything in life, it’s a tradeoff and you can’t have just the benefits of either choice. In the below table, we summarise the pros and cons our clients tell us they consider when making the decision between an emerging vs established vendor:
Other suggested considerations, irrespective of the size and tenure of the vendor you’re considering include:
- Source of capital – Is the vendor using debt to build their business or do they have investors that fund the growth?
- Ownership structure – Does the ownership structure of the vendor create any inherent conflicts of interest or affiliations with market participants that could create a challenging situation? For example; is the vendor part of an asset manager who might prioritise their needs first? Or might the vendor have owners with a short-term agenda?
In the below video, our colleagues Ulf Svensson and Tove Edman discuss the topic of benefits and drawbacks of new and old vendors in greater depth:
Pros and cons with emerging vs established vendors for asset managers and investment managers
2. Not a fit functionally
As an emerging vendor, Limina has had less time to develop the breadth and depth of functional coverage compared to some established vendors. That being said, our microservices architecture enables us to develop and deploy new functionality quickly.
Although it becomes less and less likely that we have functional gaps compared with your requirements, as each day goes by.
We always recommend that you check your current functional requirements against a vendor’s capabilities. This is true for any vendor that you may be evaluating, new or old. If a vendor can’t satisfy a key requirement, then ask if they can commit to delivering on your needs and timeline. If it's not feasible for the requirement to be met, then it may be best for you to consider other investment management solutions.
An important note to mention on this topic is that you can’t check for future requirements today. Your requirements next year might be known, but beyond that, you are less likely to know what strategies you might launch, what regulations may be introduced or how the markets will evolve. Hence, as a general recommendation, consider vendors that:
- Invest heavily and effectively (i.e. have low technical debt) in R&D, and
- Have a technological foundation that enables them to deliver fast and stable functionality
In relation to both of the above bullets, Limina is a great choice.
3. Cost cutting is the highest priority
For some firms, cost-cutting is a higher priority than other considerations such as:
- Lowering operational risk,
- Overcoming fragmented workflows,
- Increasing confidence in data, or
- Increasing oversight.
If that’s the case, it’s ok! There are times to focus on business development and there are times to focus on cost-cutting.
Limina is not always the best option if short-term cost-cutting is your primary goal. We usually enable a lower Total Cost of Ownership. At the same time, the Limina Investment Management Platform and our support model have been designed with the primary objectives to help you lower operational risk and grow. This means we have functionality such as:
- Data quality controls
- Dashboards & data drilldown
- Data import/export application
- Approval workflows for trades & changes
- Ability to capture data through its lifecycle (for example preliminary deposits/redemptions, or an allocation that is not matching)
To get the most out of the Limina IMS, proper implementation of these functional areas is recommended. The points above require initial up-front investment to get the maximum value out of the platform.
Depending on what solutions you’re comparing us with, the subscription or license fee might be higher or lower.
4. Not looking for Software-as-a-Service or cloud-native
Limina is a Software-as-a-Service (SaaS) and cloud-native offering. We have never deployed our Investment Management System and our operating model doesn’t allow us to. Hence, we’re not a great fit if you would like a deployed solution.
While asset managers increasingly prefer a cloud-native solution (and there is a shortage of them), there are sometimes good reasons for not choosing a Software-as-a-Service (SaaS) or cloud-native solution!
Two of the primary reasons are:
4A. Upgrade cycles can’t be fully controlled by you
Limina offers two schedules for releases: every 3 weeks and every 3 months. If neither of these fits your governance processes, we might not be a great fit. If you think you can’t make quarterly releases work, please contact us and we’d be happy to explore if this is truly the case – or founded on a misconception of the upgrade risks you face in legacy systems but not in a modern microservices system.
4B. You can’t have access to Limina IMS’s database
In our view, one of the biggest mistakes a cloud vendor can make is allowing clients to access the system’s database. This is because it severely limits the vendor's ability to deliver:
- A cost-effective solution,
- New and updated functionality quickly, and
- Manage upgrades in a low-risk fashion.
It’s also not recommended to engineer processes off the back of the vendor’s database as such processes might cease to work when the vendor software is upgraded (due to changes in the vendor database schema). Such database-dependent processes can also create severe challenges for you if you want to change investment management solutions because critical processes are dependent upon access to a vendor’s database.
We believe that there are equally good, or better, approaches to connectivity and integrations than database access.
If you’re not as convinced as we are, we’d be more than happy to hear your thoughts on why we might be wrong in our stance on database access – please do contact us.
4C. You're not allowed to put your investment data in the cloud
For example, if you’re a sovereign wealth fund you might not be permitted (yet) to have your data in the cloud. Or there might be restrictions on where in the world your data could be hosted if you choose a cloud vendor.
Limina IMS can run in almost any cloud environment in any geographical region, but we’re unable to deploy the Investment Management Software on your premises.
In the video below, our CTO Andreas Fürst goes into further depth of aspects to keep in mind when considering an Enterprise SaaS solution:
Our CTO Andreas Fürst talking about the limitations of Limina’s Enterprise Software-as-a-Service (SaaS) Investment Management System
5. You require a single front-to-back solution from one vendor
Our industry is in a paradigm shift from closed front-to-back Office platforms to next-generation investment management solutions that are cloud-native, highly interoperable, and extensible. Any such platform will at the core be an Investment Book of Record.
As we saw in the beginning, Limina is a Front-to-Middle office system with an IBOR, pre- & post-trade compliance capabilities and performance attribution & risk through Qontigo. Furthermore, we cover shadow NAV.
However, we don’t cover every potential functional area. At the same time, we don’t believe it’s necessary to do so. That is because our cloud-native, API foundation allows for real-time, managed integration amongst systems with the client ecosystem.
For example, Limina doesn't calculate VaR. However, Limina can consume VaR from Qontigo and surface the statistic within portfolio monitoring, compliance and other workflows.
In summary, we focus on being the industry leader within our core competencies (holistic front-to-middle office workflows) and operate within a framework that permits us to deliver complete solutions to clients via integration with client-selected technology & service providers.
When Limina might be a great fit
Hopefully, this article has been helpful in order you help you figure out if Limina might not be the best choice for you. If you would like to explore when we might be a great fit, you can read about that here or check out the video below:
Our founder Kristoffer Fürst talking about when Limina Investment Management System might be a great fit for asset managers
Do you want to explore if Limina might be a good fit for your business after all? If you’d like to learn more about our investment management platform, explore our solution or contact our team today.