A Bloomberg Professional Services Offering Investment Management
Journey case study
Improving consistency Asset Manager on a global scale. ODDO BHF Asset Management & Bloomberg Buy-Side Solutions Case study Improving consistency on a global scale
Location ODDO BHF Asset Management Headquarters in Paris, France and Düsseldorf, Germany ODDO BHF Asset Management (OBAM), the first Industry independent Franco‑German financial group, is following Investment banking, asset management two paths: expansion and front-to-middle consolidation. and private wealth After several key acquisitions, the firm increased its total
Customer profile AUM from approximately €17 billion to €61 billion in four • Asset management years. Rapid growth has spurred the firm to bring trusted • Serves wholesale clients, companies Bloomberg buy-side solutions from one office to many others. and institutional investors • €61 billion AUM • 10 offices worldwide in Europe, How buy-side firms achieve total transformation the Middle East and Asia To sustain a competitive advantage and help ensure long-term success, buy-side leaders need to develop a well-defined Target Operating Model (TOM). The TOM Target operating model ambitions clarifies the firm’s key operational goals and the changes that are necessary to achieve them. • Consolidate front and middle office activities across offices Bloomberg has helped asset management firms around the world meet a wide • Reduce total cost of ownership variety of operational objectives. Based on our experience, we have identified with a single operating model four paths that firms can take on their road to transformation: • Manage regulatory concerns 1. Specialization for multiple jurisdictions The asset manager specializes in a particular strategy, seeking to be nimble • Support cross-border as a primary TOM focus but needing to upgrade technology systems to support investment strategies rapid growth. • Improve collaboration between French and German teams 2. Expansion This asset manager has a TOM centered on local clients, but is expanding into Bloomberg buy-side overseas markets and needs a global order management platform for visibility solutions utilized of operations at a group level. • Bloomberg Asset & Investment Manager (AIM) 3. Front-to-middle consolidation • Bloomberg Transaction Cost Analysis This firm aspires to align its investment professionals across the investment (BTCA) life cycle through a single front and middle office, with a TOM of achieving a centralized model for data consistency. • Bloomberg Portfolio & Risk Analytics (PORT) 4. Firm-wide alignment • Bloomberg Multi-Asset Risk System The manager seeking to centralize and overhaul all operating systems as part (MARS) of business transformation, with the TOM of securing the golden source of data ® • Bloomberg Terminal powering a global OMS, a single accounting book of record and data utility • Bloomberg Data License across all locations, centralized middle office and/or execution desks. • Bloomberg Enterprise Gateway
“We are building portfolios with our colleagues in Dusseldorf and Frankfurt. Having a global strategic view of our portfolios makes the process much easier, both for regulatory purposes as well as cross-border marketing and investment strategy development.” Julien Meesters, Global Project Manager, ODDO BHF AM Case study Improving consistency on a global scale
1. Managing extensive growth “The main challenge was to make sure that our processes were consistent across all locations,” said Julien Meesters, ODDO BHF Asset Management (OBAM) is part of the Global Project Manager for OBAM. “It is always difficult when independent Franco-German financial group ODDO BHF, a business that has been acquired must switch from a familiar founded in 1849. OBAM is an independent asset management workflow to a new one. As a result, we needed to be very leader in Europe, comprising ODDO BHF AM GmbH in confident in the capabilities of the technology we were asking Germany as well as ODDO BHF AM SAS and ODDO BHF our new locations to use.” Private Equity SAS in France, which together manage assets totaling €61.5 billion. 2. Avoiding fragmentation OBAM offers institutional and wholesale clients a unique range of high-performance investment solutions in all main asset Although it would have been easier to let new offices retain classes, including European equities, quantitative strategies, their existing technology, the risks of a fragmented ecosystem fixed income, multi-asset solutions, and private equity. On a outweighed any temporary benefits. combined basis, 70% of assets under management are from “Maintaining one operating model is hard enough,” Meesters institutional clients and 30% from distribution partners. said. “Keeping two or three is even more difficult. Moving all of OBAM puts long-term client support at the heart of its our locations to Bloomberg AIM was an important prerequisite. priorities, and itsindependence allows its teams to be It took some time, but in the end everyone understood the responsive, flexible and innovative in order to find solutions potential gains in efficiency and cost.” tailored to customers’ needs. While it is true that each location serves different clients and Since 2014, OBAM has undergone rapid and extensive growth. contends with a unique set of regulatory requirements, it was The challenge in this situation, however, is ensuring that every strategically important for the firm to manage daily workflows part of the organization aligns to the same operating model. on the same technology platform. This not only makes it easier For the asset management arm of the business, this included to establish a consolidated view of portfolios and positions front and middle office operations. but helps minimize operational risk.
TOM Specialty-focused path Target Operating Model The boutique asset manager specialized in a particular strategy, seeking to be nimble as a primary TOM focus but needing to upgrade its technology systems to support rapid growth.
How OBAM follows the expansion-focused path • Completed four major acquisitions in four years • Maintains 10 offices on two continents • Requires a centralized view of global portfolios and positions
How OBAM follows the front-to-middle consolidation path • Target operating model focused on creating consistent processes from the front office through to middle office operations • Centralized views of portfolios, holdings, position-keeping, risk analysis and reconciliations
Firm-wide alignment path The manager seeking to centralize and overhaul all operating systems as part of business transformation, with the TOM of securing the golden source of data powering a global OMS, a single accounting book of record and data utility across all locations, centralized middle office and/or execution desks.
OBAM has followed an expansion-focused journey since 2014, completing four major acquisitions in four years and nearly doubling AUM. Today, the firm’s bigger priority is front-to-middle consolidation as it seeks to align all global offices to a single, highly efficient operating model.
*For more information about the four paths, please see our white paper: “The journey to tomorrow’s buy-side operating model.”
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“Often we develop global strategies for our funds, so having From a regulatory perspective, consolidated portfolios enable different technology infrastructure in each office would have OBAM to navigate requirements that apply to the entire firm caused a lot of problems,” Meesters said. “The goal of combining as well as those that affect the French and German offices our organizations was to have entities across Europe as well as differently. The ability to apply internal rules consistently is to create a uniquely Franco-German strategy. To do that, you another important benefit. really need to have a single operating model.” “With AIM we can easily apply rules for thresholds, ratios, and other constraints at the global level or the portfolio level,” 3. Streamlining the transition Meesters said. After receiving some initial pushback, OBAM enlisted While functionality is the most important requirement that Bloomberg ‘s help from to make the transition as smooth AIM meets, the increase in cost-efficiency is not lost on OBAM. as possible. “If you have two different operating models, it’s much The firm’s first acquisition in Germany was Meriten Investment more expensive than supporting one,” Meesters said. Management. For this changeover to AIM, Bloomberg “We are conserving costs by transitioning everyone to deployed an implementation team on site to help create the same technology.” the new operating environment. Along the way, this team effectively showed the firm’s staff how to manage future transitions, which they did when BHF Bank was acquired. 5. Adapting & growing In both cases, the results were positive. All of the firm’s offices that have adopted Bloomberg buy-side “Once the merger was complete and our portfolio managers technology are fully accustomed to using it to manage the life were working on the AIM platform, everybody was satisfied cycle of their portfolios, orders, compliance and operations. with its performance,” Meesters said. OBAM professionals enjoy consolidated views of thresholds and portfolio strategies, which makes it easier to standardize Sharing a common buy-side platform, including an OMS, also processes and tools across entities. helped overcome some cultural differences between offices in the two nations. The German offices were highly specialized “Everyone is very pleased with what the suite of solutions in their strategies and accustomed to more bespoke tools. can do, including AIM, BTCA, PORT, and MARS, especially The French office, however, had used AIM for several years, the portfolio managers,” Meesters said. “We all use AIM for the and so key decision-makers were able to show their German usual front office tasks as well as risk analysis, reconciliations, counterparts how AIM could deliver the functionality they and other middle office activities. It is convenient to use one needed. This experience helped build trust between the teams. provider from end to end.” OBAM also uses the Bloomberg Enterprise Gateway to connect 4. Benefits of a single buy-side platform with other in-house systems. This managed middleware Using Bloomberg AIM alongside other Bloomberg buy-side platform can transform, enrich, and orchestrate a wide range solutions gives all OBAM offices capabilities to meet the wide of data and processes, providing a single point of control for range of front and middle office needs. One of the biggest enterprise workflows. advantages of the platform is that it integrates directly with Overall, choosing Bloomberg as a buy-side technology partner the Bloomberg Terminal, which means that all instances of AIM has been a positive decision for OBAM, one that has supported are fueled with consistent market and static data. This makes the firm’s efforts to expand its global presence and achieve it easy for OBAM to access a centralized view of portfolios greater consistency in its operating model. and holdings as well as develop price waterfalls, custom classifications, and derivative valuations. “Working with Bloomberg has made it easier to combine our organizations,” Meesters said. “Using Bloomberg AIM “We often build portfolios with our colleagues in Dusseldorf and the Bloomberg Terminal has made it more convenient and Frankfurt,” Meesters said. “Having a global strategic view to merge. And the fact that we have access to a 24/7 help of our portfolios makes the process much easier, both for desk is a big advantage.” regulatory purposes as well as cross-border marketing and investment strategy development.”
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Learn more
Key moments from the journey Bloomberg provides multi-asset execution and order management solutions and investment cycle analytics that enable buy-side and Here are some key insights from the firm’s sell-side firms to turn their trade and order data into a competitive transformation journey: advantage. As a result, firms can create more efficient workflows, connect to the global capital markets, drive regulatory compliance • Single operating model improve efficiency and lower their total cost of ownership. and total cost of ownership To learn more, email our AIM team at [email protected]. • Moving to new technology goes more smoothly with the right partner • Centralization of portfolios and positions eases decision-making • Consolidation on one platform can help bridge cultural barriers
“Everyone is very satisfied with what the suite of solutions can do, including AIM, BTCA, PORT and MARS, especially the portfolio managers. We all use AIM for the usual front office tasks as well as risk analysis, reconciliations and other middle office activities. It is convenient to use one provider from end to end.” Julien Meesters, Global Project Manager, ODDO BHF AM
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