Welcome to the stradegi blog.

stradegi has seen interesting times since its inception. Beginning with the first step in the founding of a new consultancy business exclusively for the buy-side, to the topsy-turvy year for stock markets, to the ever-changing dynamic landscape of Investment Management, stradegi has expanded both geographically and in size.

As we grow and learn, we wish to initiate a blog to share our experience and present our views on matters pressing to the industry. Eventually the objective of this blog is to be in constant touch with our clients and our peers and also contribute in some way towards the overall objective of a sound, efficient and trusted investment management industry.

We will ensure that the content is new and insightful, taking ideas from our own consultants and industry experts. Your comments and views on the posts are welcome and much appreciated.

Ammar Ali

Probing Investment Research: Uncovering Process Challenges

Research remains an integral part of the investment process for all investment management companies. Meticulous research does not end post identification of alpha generating securities, but continues by way of regular monitoring of landscape changes that may impact how these securities perform in the market.

The process for generating investment ideas may differ based on the investment research policy, whereby internal research can be augmented by third-party research; however, majority of investment managers rely on third party sell-side research as a starting point, which is widely available to any party that is able and willing to pay for it. The generic and often biased nature of this sell-side research warrants intensive evaluation by the investment managers before making informed investment decisions.

Author Ammar A. Ali, CFA

Business Consultant, Stradegi


Ammar is a Chartered Financial Analyst and has worked primarily in Investment Research and Management with focus on listed equities in Asian markets.

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Gustavo Bernal

Milking the Digital Cow

For consultants, meetings with a potential new client can be very similar to a job interview.

  • What do you think are the main challenges for Asian asset managers?
  • What trends are you seeing in product development?
  • Best practices in valuation of illiquid foreign assets?

These have typically been some of the questions that prospects use to evaluate us and our firm. However, questions around themes such as digital disruption and flavour-of-the-month topics such as IoT for investment decisions, blockchain and robo-advisors are increasingly becoming more common.

Author Gustavo Bernal

Business Development, Stradegi


Gustavo is responsible for business development at Stradegi Consulting and is experienced in portfolio management and financial regulation development.

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Ammar Ali

Hiring technology for your investment process?

“People today are in danger of drowning in information; but, because they have been taught that information is useful, they are more willing to drown than they need be. If they could handle information, they would not have to drown at all.”
- Idries Shah, Reflections

The above quote summarizes today’s day and age where information available is more than any party can even begin to use. Experts believe those who do not start using this data to improve their offering may be swept under the wave. Technology companies have started disrupting all business models. From consumer marketing to client interactions, everything is changing. In all this disruption there’s one recurrent theme, customization or giving the customer what they need. The ease of access to insurmountable information doesn’t come without a cost. Studies have shown that individuals have lost their ability to concentrate due to the internet, in addition, being spoilt for choices has also resulted in making every day decisions difficult, or at least made us heavily reliant on bots in making these decisions for us.

Author Ammar A. Ali, CFA

Business Consultant, Stradegi


Ammar is a Chartered Financial Analyst and has worked primarily in Investment Research and Management with focus on listed equities in Asian markets.

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Vera Huang

Why ? Why Not!

Vera Huang, Business Consultant at Stradegi Consulting talks about her experience so far at the firm.

Officially a Stradegi Consulting employee since January 2016, I am now working as a business consultant. Yet my journey with Stradegi started in May 2015 when I was brought in as an intern, and since began my journey with the firm. So, what exactly is Stradegi? What is so special about this firm that was founded only three years ago that made me join officially after the internship?

Author Vera Huang

Business Consultant, Stradegi


Vera is a Business Consultant primarily focused on middle and back office functions. Vera has worked on process reengineering and client onboarding engagements with fund service providers.

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Gordon Brown

Lessons Learned and a Thank you to all who participated in this year’s Asian Investment Management COO Survey

Late last year, in a meeting with Lilian Tham the Asia COO for Schroders, Lilian suggested we consider putting together an Asian Investment Management Operational survey. We at Stradegi loved the idea, the survey would be of some benefit to the industry and also give us the ability to interact with the very individuals we were looking to service and do business with. What a great idea, great exposure, gain insight, show off our capabilities and look creditable and smart all at the same time. A “no brainer” all that was required was a little work which as consultants we were used to doing anyway.

Author Gordon Brown, CFA

Managing Partner, Stradegi


Gordon Is a Chartered Financial Analyst and has over 20 years of Global Asset Management experience with the last 9 years spent in Asia. Prior to establishing Stradegi, Gordon was the Head of Business Change and Technology at Prudential (now Eastspring Investments). At Eastspring, Gordon was responsible for business, operational and technical transformation.

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stradegi is an Asia based management consultancy exclusively focused on the investment management industry. The team advises asset managers, insurance companies, pension funds and sovereign wealth funds in the areas of business strategy, operational best practices and governance.

The firm was established in 2013 in Singapore by a group of individuals with significant experience in senior roles on the buy-side. Our consultants have first-hand experience of the pains and frustrations that management teams go through in resolving Front, Middle and Back Office issues, and thus offer targeted and relevant advice.

The stradegi team brings an expert, practical and independent view that is based on an in-depth understanding of the buy-side in Asia.


Stradegi’s Thoughts from the Recent Asia Pacific Chapter of The Spaulding Group’s Performance Measurement Forum

Gordon Brown

Stradegi attended The Spaulding Group’s inaugural meeting of the Asia Pacific chapter of the Performance Measurement Forum in Singapore, held last month on the 15th and 16th of October, 2015. There was a good mix of attendees from asset managers, asset owners as well as solution vendors. The forum discussed the latest developments in the performance management sphere, and the discussions raised some interesting themes worth writing about.

One of the themes that is prevalent in our industry is about the various “BOR” (book of records) – specifically the ABOR (accounting), IBOR (investments), PBOR (performance) and RBOR (regulatory). In practice, asset managers are moving towards a single “golden” set of BOR, that is turning out to be the IBOR. Global asset managers have operations in multiple countries, and all of these local country offices need to have separate set of ABOR’s (accounting book of records) to satisfy local regulatory and accounting regimes. An investment book of records, the IBOR, is a step towards rolling up all the local office BOR’s and getting a consolidated view of investments across the organization. The data from all of the local country offices is validated, cleansed and transformed into a common set of records that can loaded into the organization wide IBOR system. This gives decision makers in the firm a consolidated set of information that can be used to launch new products, refine regional strategies or support regulatory requirements. Stradegi is seeing an increased interest from asset management firms in Asia-Pacific to consider an IBOR solution, and is working with clients to evaluate and formulate cross functional project plans for IBOR implementations. In our view, a well-designed IBOR solution should be able to meet most of the requirements of the organization, rather than having multiple “BOR” solution and the added complexity of maintaining all these BOR solutions.

As the business reliance on timely P&A (performance and attribution) is increasing in asset management firms, operations teams are finding it hard to meet these requirements. As a result, the operations and technology challenges within the P&A function in asset managers is increasing. Improving the P&A process is not about buying a system, or throwing more data at existing systems, but to go top down from understanding the strategy of the firm and creating a target operating model that is driven by the business model, which then drives the functional model, leading to the organisational design and then the enterprise architecture. The TOM (target operating model) should be an evolving model and should meet the evolving needs of the business, and rather than adopting a big bang approach - having perhaps a measured approach with a feedback loop in the process is better. With every project it would be prudent to have both change management experts, as well as subject matter experts guiding the project forward.

Within the Asian asset management context, there was a discussion around performance and risk functions not collaborating as closely with the front office as they should, and these functions are seen as more of a support function for reporting and regulatory needs. We feel that there could be better working relationships within the front and middle office, with the front office using the performance and risk functions to create better and more robust investment portfolios. We think that it is perhaps best driven from top down rather than bottom up. The senior management have to take ownership and drive the way forward towards greater collaboration between investment, performance and risk teams. Another potential area of improvement is subjecting internal performance and risk teams to service level agreements so that there is a convergence of expectations between teams and clear accountability from the performance and risk teams.

A common area of contention is with calculation of performance numbers in the private equity industry. The perspective of GP’s and LP’s is different from a PE perspective, and the debate is whether the reported IRR’s represent the true performance of the PE funds. PE funds have a ramp up of capital requirements till the time they are fully invested, however from an investor’s (LP) perspective, they need to allocate a certain amount of capital upfront, hence the question is whether using pure time weighted cash flow returns depict the true nature of returns. From the LP’s perspective the problem with IRR’s is that IRR assumes that all cashflows can be reinvested at the fund’s IRR, which is not a realistic assumption. One alternative which can be considered is a modified IRR or MIRR, which assumes interim cashflows are invested in money market instruments. MIRR probably gives a more realistic picture of fund performance, however the investors can be given a range of metrics including IRR and MIRR and then the investors can get the true picture of the fund performance.

Finally, there are no clear standards on performing attribution of private assets from an asset owner perspective. Asset owners have a portfolio of private assets that they invested in. From a private asset perspective, the performance of individual investments is reported in IRR terms. However if you aggregate cashflows, you could create a portfolio IRR. The issue is that the portfolio IRR’s cannot be decomposed into individual investment IRR’s. Hence the performance teams struggle to create meaningful attribution numbers in IRR terms. In our experience while working with asset owners in this region, valuation and attribution of private assets is a recurrent theme, where there is no set standard across multiple jurisdictions. It will be interesting to see how a common set of standards arise, both in terms of measurement as well as attribution of private assets in our industry.

Investment Risk Management


Financial technology has spread from west to east, spurring banks and other capital markets participants in the Asia-Pacific region to change the way they operate or face an uncertain future, as disruptive technologies and new players threaten traditional operating and delivery models

The US and London may be ahead of Asia-Pacific in terms of their fostering of financial technology, but there is huge potential in the region that both the start-ups and established financial institutions are keen to capitalise on.

"I don't think Asia is ahead of the curve but I do believe Asia could be quick to adopt [new technologies], because what you want to look at is the impact of innovation and where it would be the highest," says Francois Monnet, managing director and COO for private banking, Asia-Pacific, at Credit Suisse. "For example, with mobile technology, the penetration is much higher in Asia than in the US; it shows there can be quicker adoption here."

Nowhere across the Apac region is the hype of fintech felt more than in Singapore and Hong Kong, as the two traditional financial powerhouses lock horns to be Asia's go-to innovation hub. While much of fintech's focus has previously, and to a certain extent currently, been centred on developments in B2C innovations and crowdfunding, start-ups are turning their attention to B2B solutions for the capital markets and the two cities are where the tide will turn according to some.

Markus Gnirck is co-founder and global COO of Startupbootcamp Fintech, a Singapore-based fintech accelerator programme that offers start-ups the opportunity to work, and ultimately partner, with financial institutions seeking to leverage new technologies.

"We see a lot of stuff happening in Asia," he explains. "Venture capitalists and investors are pumping money into the fintech market, which is exciting. There will be 450 million people in Asia moving to the middle class in the next five years." Last year there was a total investment of $4 billion into the Asian fintech market, according to Gnirck; during the first six months of 2015, that sum tripled to $12 billion. While those figures may be dwarfed by the investment pumped into the US and European fintech markets, there is a clear appetite from Asia-Pacific investors.

Press Release



Stradegi to Support BI-SAM Business Development and Provide Implementation Services to BI-SAM Customers Across Asia Pacific

Singapore – October 21, 2015 – BI-SAM, the leading provider of sophisticated digital solutions for performance, attribution, risk, GIPS composites management and reporting, today announced their partnership with Stradegi, an Asia based management consulting firm exclusively focused on the investment management industry.

The relationship follows the two firms’ successful collaboration on an implementation of the BI-SAM B-One performance platform earlier this year for a prominent East Asia government agency pension fund. Stradegi will support the BI-SAM business development process across multiple APAC regions, and provide local implementation and customer support for BI-SAM’s best-in-class B-One platform

“We are committed to expanding our growth across Asia, and ensuring a seamless experience for our customers in the region,” said William Haney, CEO, BI-SAM. “Stradegi’s technology and local business expertise are a fine complement to our best-in-class solutions, services and support. Stradegi has proven their ability to successfully deliver rapid implementation of the B-One solution, and we are pleased to select them as a trusted partner in Asia.”

Gordon Brown, Managing Partner at Stradegi stated, “Stradegi is very excited to be working with the BI-SAM team. BI-SAM’s B-One solution is globally recognized as the best Investment Performance solution in the market. We feel that the client and regulatory driven need for increased transparency in the investment process makes BI-SAM the winning solution in this fast moving region.”

B-One is BI-SAM’s award-winning, market-leading cross-asset solution, designed to centralize performance management processes across a single platform, including data management, performance measurement and reporting, attribution and risk analysis and GIPS composite management and compliance.

About BI-SAM

BI-SAM is the leading provider of sophisticated digital solutions for performance, attribution, risk, GIPS compliance and reporting. Many of the world’s largest asset managers use BI-SAM to evaluate and enhance their investment strategies and better service their clients, while maintaining high levels of security, transparency, process control and operational scale. BI-SAM’s unique combination of best-in-class product capabilities and staff expertise positions performance analysts to deliver sophisticated, timely results that exceed the expectations of both colleagues and clients.

About Stradegi

Stradegi is an Asia based management consultancy exclusively focused on the investment management industry. The team advises asset managers, insurance companies, pension funds and sovereign wealth funds in the areas of business strategy, operations, technology and governance. The firm was established in 2013 in Singapore by a group of individuals with significant experience in senior roles on the buy-side. Stradegi consultants have first-hand experience of the pains and frustrations that management teams go through in resolving Front, Middle and Back Office issues, and thus offer targeted and relevant advice. The Stradegi team brings an expert, practical and independent view that is based on an in-depth understanding of the buy-side in Asia.

Stradegi in the News

Asia Bursts Ahead, Yet AMs Lag Behind


Tim says new numbers published this week by Stradegi and PricewaterhouseCoopers (PwC), with 34 Asian asset managers' COOs in tow, suggest differences in capability and direction in this still-burgeoning region.

Along with the robo-advisors, which I wrote about last week, another somewhat under-the-radar development we've seen in 2015 was Asia's entry into the fintech innovation space, often with two confident and very well-funded feet.

From wealth managers raving about reversing the global flow of technology innovation, now running from Asia back to Europe and North America, to Singapore's MAS announcing millions in startup and incubator funding and the ASX actively considering blockchain for its entire trade settlement system, the Asia-Pacific region has truly heated up.

Big Gaps

Competition among fund and asset managers—and among jurisdictions—is intense here, too. But the first Asia Investment Managers COO Survey from Stradegi consultants and PwC, published earlier this week, tells a rather different story about their technology prowess.

Namely, they're still lagging behind their global peers in a number of areas—sometimes glaringly.

The inaugural study used comparative data from an international array of managers to highlight differences across the front, middle, and back offices at 34 investment houses in Singapore, Malaysia and Hong Kong. They varied evenly in size from boutique to more than $50 billion in assets. Several interesting results emerged.

If I'm an investor, what do I care about more: the freshly-minted blockchain the exchange is using, or the basis points I lost executing at one venue over another?

Two front-office areas—transaction cost analysis (TCA) and soft-dollar oversight processes—came in with a sub-60 percent adoption rate in Asia, with TCA in place at only half, and soft-dollar oversight in place at only 55 percent of shops. Global asset managers reported 86 and 79 percent, respectively.

Middle-office ops capabilities were more closely aligned across regions, while the back office saw even greater gaps.

In this area, six different categories, exactly half of the 12 queried—including project management governance, technical development governance and outsourcing oversight—came in at or below the six-in-10 threshold, with some scraping 40 percent or even lower.

In several cases, this created a significant gap of 30 percent or more between Asian managers and their peers. For example, technology development governance (call it dev gov) was reportedly in place at a startlingly low 40 percent in Asia; 71 percent elsewhere.

But Why?

So why disparities, and why the conflicting news on Asia? The report argues that many of the areas where Asian managers lag also happen to lack regulatory mandate.

In the back office, most of the "regulated areas" information security, and pricing and performance error reporting, to name two—have a much higher-percentage capability (though notably, they're all still somehow under 90 percent, meaning a handful of firms willingly admit that they're out of compliance).

Another area the authors highlight is outsourcing, and the comparatively lighter use of it in Asia than elsewhere. If you're not outsourcing or exposed to that many vendors, your governance and dexterity around these areas will, of course, be weaker.

This is certainly an argument we've heard before, too. Despite buy-side assets under management exploding in the region, many technology providers have only dipped their toes in Asia, making the cost of service for certain functions higher for end-users in an easy case of low supply and increasing demand.

Here, the reasons why are also well-tread: Regulatory fragmentation makes it difficult to do business; cultural differences abound; and clients simply aren't mature enough to need the higher-cost wares, making an Asian foray uneconomic, among others.

Harsh Reminder

All of that may be true. Still, it really amazes me that 50 percent of representative Asian managers are running without proper TCA, or that a full 70 percent lack a process to determine fund jurisdictional structure. No way around it: those are staggering numbers in 2015.

The only way either of those things works in practice is if a) your investments are in a single, broadly lit and unfragmented national market, and b) if your funds are all domiciled in the same place.

Neither seems likely at a time when even the smallest Asian emerging markets (EM) managers have their eyes on at least three or four markets, and when the prevalence of Ucits and diverse fund structures makes domiciling much more complicated. It could be done, sure, but you would be greatly inhibiting any pathway to growth as a result.

And if that sentiment sounds like the complete opposite of the "Fintech in Asia" story, that's because it is. While payments and settlement ledgers and high-net-worth client portals all take a leap forward, it should serve as a reminder that other crucial functions in the institutional space get left behind.

If I'm an investor, what do I care about more: the freshly-minted blockchain the exchange is using, or the basis points I lost executing a huge block at one venue over another?

For me, it's an easy answer. But at the moment, that's not where the money's going.

COO Survey Report 2015

Best Practices and Challenges in Asian Investment Operations: COO perspectives

Many Asian Investment Managers lag their Global counterparts in the adoption of operational best practices. This was one of the findings of the inaugural Asia Investment Management COO Survey, initiated by Stradegi Consulting and PwC, which also highlighted key challenges faced by the COOs and outsourcing trends in Asia

The Investment Management industry is at a crossroads. A major transition is underway with the rapid growth of wealth in Asia, the rise of passive players, the compression of operating margins and increased regulations. In this highly complex and competitive landscape, the role of the Investment Management COO will grow in importance as strategic decisions on providing scalable product support, building or outsourcing major operational components and the adoption of best practices, will have a significant impact on a company’s growth.

Asian Asset Managers - Key drivers of outsourcing decision
coo survey report 2015

It is in this context that Stradegi and PwC conducted an annual Asia Investment Management COO survey, with an aim to understand where the industry stood in terms of operational best practices, the priorities and challenges faced by COOs in Asia and the trends in operational outsourcing.

This year the survey focused on three key markets, Singapore, Hong Kong and Malaysia, with a total of 34 Asia-Pac COOs responding. In terms of assets under management in Asia, slightly less than half of the respondents (44%) were from firms managing assets less than US $5bn, followed by almost a third (31%) managing assets between US $5bn and $50bn and the rest (25%) managing over US $50bn.

The survey highlighted that although investment managers had a relatively higher adoption of best practices in the Front and Middle office, there was a tendency to ignore best practices in the Back Office unless explicitly mandated by regulation. Surprisingly, certain functions, such as “outsourcing oversight” that are regulated and are part of best practice, are currently neglected by some respondents. Commenting on this trend, Gordon Brown, Managing Partner at Stradegi, said, “For an industry that wishes less regulation and more self-regulation, this has to be a disturbing trend.”

Asian vs Global Asset Managers

The results of the survey, which consisted of 59% asset managers that operated only in Asia and 41% that operated globally, highlighted that the Asian asset managers lagged their global counterparts in adopting comprehensive operational best practices. This could be due to the fact that the Asian managers are smaller in size and are yet to achieve scale; their priorities and customer base are also different. Regarding this trend, Jeff Plein, COO of Fullerton Fund Management said, “It’s a governance issue. Regardless of size, asset managers need to assure that they have the right governance in place to minimize risk. This is especially true given the increased regulatory focus on outsourcing globally.” Global players have faced higher regulatory scrutiny and have had to adopt best practices to ensure consistency and scale across global platforms in order to mitigate operational risk. As Asian Investment Managers grow geographically and in size, the adoption of best practices will take on more importance.

Global Asset Managers - Key drivers of outsourcing decision
coo survey report 2015

The survey also found that Asian and global players have different priorities in the performance and risk functions. Many Asian investment managers have not yet incorporated performance and risk analytics in their investment process and around 70% of them voted for the inclusion of these analytics in the investment process, as one of their top priorities. Global asset managers on the other hand, who already have established processes around Performance & Risk, are now looking for solutions in these areas that can support them globally.

Asian managers voted “costs involved” as the most important criteria that influenced the decision to outsource whereas global managers considered “strategic significance” and the “ability to release capacity” as the key drivers for outsourcing. This difference in perspective could be due to the varying levels of business maturity - Asian managers, who are still relatively young and striving to achieve scale, are still very cost conscious and near term in their outlook. Global managers on the other hand, are more mature businesses and are looking to partner with trusted and credible service providers who can support their geographical and product growth aspirations.

“If you are going to outsource purely from a cost perspective, it’s not going to work. It’s not going to be cheaper. Even if it’s cheaper, it’s marginal. If you don’t have a proper framework to manage your vendors and work with them as partners, you are going to find a lot of hindrance to grow your business.” stated James Tan, COO of LionGlobal Investors.

Top Challenges

What are your top three challenges in managing operations?
coo survey report 2015

Considering the environment post the Global Financial Crisis, it came as no surprise that “meeting regulatory requirements” (50% votes) and “ensuring scalability of operations” (38% votes) were the top challenges voted on by the COOs. The global impact of increased regulatory scrutiny and the need to reduce costs are both common challenges faced by all financial institutions across the globe.

The support for new products in new jurisdictions to meet new distribution channels in a cost effective manner poses significant scalability challenges for COOs in the region. Rob Scott, Head of International Operations, Asia-based Global Asset Management Company, AUM USD 160+ Billion, affirmed this stating, “The key challenges when managing operations are: 1. Finding and retaining the right people, 2. Implementing and correctly executing the processes that provide the business all the operational capabilities they require, and 3. Being able to scale enough to grow with the business as it expands and head in different directions.”

Outsourcing Trends

Which of these functions are you comfortable outsourcing?
coo survey report 2015

The results of the survey showed that operational outsourcing in the industry is projected to grow in Asia, with only 6% of the respondents expecting the outsourcing budget allocation to reduce in the near term. As investment managers strive to address operational scalability issues, the outsourcing option will always be on the agenda.

The survey breakdown of outsourcing trends reinforced the belief that the fund managers are only comfortable outsourcing functions where service providers have a mature, reliable and tested service offering. Transfer Agency, Fund Accounting, Collateral Management, Trade Matching and Reconciliations have been a staple offering of fund service providers for a number of years and have become standard components of an efficient, cost effective and scalable operating model.

In contrast, what came as somewhat of a surprise was the lack of interest in outsourcing middle office functions like Investment Performance, Cash Management and Risk & Compliance reporting. This lack of interest might have something to do with the quality and the maturity levels of the service providers currently available in the region.

The survey also highlighted useful information with regard to other operational trends including headcounts and budget allocations.

With regard to the plans for future surveys, Gordon said,“We believe that over time, this annual survey will become a repository of best practices and trends in Asian Investment Management operations and will help COOs in their strategic decision making. We will be interacting with the COOs on an ongoing basis to include other relevant topics of interest in upcoming editions of the survey.”

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