simcorp dimension for the asset management industry

www.simcorp.com

MITIGATE RISK REDUCE COST ENABLE GROWTH

SimCorp Dimensionfor the asset management industry

3Table of contents

Table of contents

Mitigate risk, reduce cost and enable growth in the asset management industry 4

SimCorp Dimension: a modular and scalable

solution for asset managers 4

Meeting asset management industry challenges with SimCorp Dimension 6

Mitigate risk with SimCorp Dimension 8

Mitigate risks in the investment process 8

Reliable market risk assessment 8

Manage operational risk 10

Mitigate risk with straight-through-processing 10

Mitigate counterparty risk 12

Reduce cost with SimCorp Dimension 14

Cost reduction throughout the organisation 14

Crucial focus on operational costs 14

Reduce labour costs with SimCorp Dimension 16

Enable growth with SimCorp Dimension 18

Create value through scalability, cost

reduction and product innovation 18

Value creation through innovation 18

Scalability: a key ingredient to growth 21

Growth through low-cost leadership 22

SimCorp Dimension for the asset management industry 24

SimCorp: global investment management software developer of the future 26

Thought leadership in investment management: SimCorp StrategyLab 28

Contact information 30

Learn how SimCorp Dimension meets the challenges

faced by asset managers.

Pages 6-7

Learn about the automated workflow for daily asset

management processes provided by SimCorp Dimension.

Pages 24-25

Learn about SimCorp: a solid business partner committed

to continuously delivering cutting-edge technology and

know-how for the asset management industry.

Pages 26-27

Learn about SimCorp StrategyLab’s research concerning

the global asset management industry.

Pages 28-29

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Mitigate risk, reduce cost and enable growth in the asset management industry The asset management industry is experiencing a period of unparalleled change, driven by, among other things, a need for more transparency and better reporting, an increasing list of new client demands, more rigorous regulatory controls and fundamental changes to the f inancial markets.

SimCorp Dimension: a modular and scalable solution for asset managersAsset managers must continuously reconcile meeting the

challenges imposed by clients, regulators and the market

with the containment of operational costs and fostering

an environment for growth. As a result, many asset man-

agers seek to utilise their IT investments in a more strate-

gic manner, with the intent to achieve superior scalability

and agility for their businesses.

SimCorp Dimension is a comprehensive investment man-

agement system offering asset managers unprecedented

flexibility, scalability, functionality, usability, performance

and reliability in a highly configurable and fully integrated

modular solution, helping asset managers to mitigate

operational risk and reduce costs.

As one of the benefits of these system-wide features,

SimCorp Dimension’s high degree of scalability ensures

support for a virtually limitless number of new products,

portfolios and client mandates, incorporating a complete

range of financial instruments while minimising incremental

costs. As a result, SimCorp Dimension allows asset man-

agers to focus on their core competency, namely provid-

Mitigate risk, reduce cost and enable growth in the asset management industry

5


ing alpha for their clients through automation of processes

that were previously handled on a manual basis. In addition,

the high degree of automation, coupled with a single data-

base that facilitates the transparency demanded by clients,

positions asset managers for growth through strategies

such as product innovation, low-cost leadership, geographic

expansion, and mergers and acquisitions. In summary,

SimCorp Dimension is designed to meet the needs of

asset managers and provide the infrastructure to support

their strategic growth objectives.

By implementing SimCorp Dimension as the core asset management system for its London branch, DIAM International has:• increased transaction volumes by 50% with no

increase in operational staffing levels;

• reduced risk in the business by moving to a single

system, thus avoiding disparate data sources;

• eliminated the cost of maintaining several systems

and the need to integrate diverse systems with

one another;

• implemented an asset management platform that

supports the current business and is flexible

enough to adapt as business and market require-

ments dictate.

For more details on how DIAM International and

other companies have benefited from SimCorp

Dimension, please visit www.simcorp.com/cases.

Want to learn more?

Learn how SimCorp Dimension seamlessly ties all

asset management operations into one flexible,

transparent and efficient

workflow.

Download ‘The

enterprise solution

for the investment

management industry’

brochure at

www.simcorp.com/

brochures.


6

Meeting asset management industry challenges with SimCorp Dimension

SimCorp Dimension offers solutions that are tailor-made to meet the challenges faced by the asset management industry. Discover how SimCorp Dimension helps asset managers:

Mitigate risk • Position data is available across all

asset classes, and the same risk models can be applied to all data using the same market data and risk factors.

Reduce costs through

automation • Automated processes

reduce costs related to manual errors.

• Labour costs related to maintaining multiple, disparate databases and systems are eliminated.

Provide transparency throughout the

investment process• Transparency is maintained throughout processes

concerned with counterparty exposures, fees and commissions, end-of-period calculations or valuations and the structure of investment portfolios.

• An STP process for investments ensures a transparent and comprehensive workflow.

Enable growth through scalability and flexibility• New products and higher transaction volumes can be

accommodated without a corresponding increase in costs.• Open architecture facilitates integration with any number

of external data sources.• Increasingly diverse reporting requirements are easily met.

The challenges facing the asset management industry today compel its players to seek out and leverage new tools to support their business strategies. At the executive level, it has been acknowledged that IT infrastructure must be utilised in a strategic and sustainable manner. SimCorp Dimension fully meets current and future system requirements seen in the light of these market trends.


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Adapt more easily to new regulations• A clearly segregated tax regulation

structure means that new tax regulations or changes can easily be accommodated.

• Up to ten accounting methods can be deployed per portfolio.• Reporting solutions are provided to meet any reporting requirements.

Add new products or financial

instruments with ease• SimCorp’s XpressInstruments tool facilitates the addition of new instrument types quickly and efficiently.

Minimise the impact of mergers

and acquisitions• Extensive enterprise-wide functionality

and connectivity tools eliminate the many risks associated with IT integration or consolidation following a merger or acquisition.

Enter new geographical

markets more rapidly• Extensive localisation and

comprehensive support for local regulatory requirements minimise time-to-market when entering

new geographical markets.

Scale the business without

additional headcount• Integrated investment processing leverages product and portfolio structures throughout the enterprise, ensuring data validity and consistency and eliminating manual processes.


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Mitigate risk with SimCorp Dimension Recent events in the financial industry have clearly illustrated the ramifications of an incomplete or loosely enforced risk management function. As a result, investors are making much more stringent demands on the level of risk they are prepared to assume, while continuing to demand a high return on their investment. This envi-ronment forces asset managers to effectively manage the many forms of inherent risk in their business models in order to minimise the bottom line impact and at the same time ensure a high degree of stakeholder satisfaction.

Mitigate risks in the investment process In the aftermath of the global financial crisis, much more

emphasis has been placed on risk mitigation in the asset

management industry. Of particular concern to many asset

managers are market risk, counterparty risk and the risk of

non-compliance. SimCorp Dimension is designed to help

asset managers effectively and accurately assess and report

these and other forms of risk to all stakeholders, including

management, clients and authorities, using industry

standard key ratios. In addition, SimCorp Dimension’s

single-database, straight-through-processing architec-

ture helps mitigate operational risk by eliminating man-

ual processes and ensuring decisions are based on up-

to-date and accurate data and information.

Reliable market risk assessmentAsset managers are often selected by their clients for

their ability to generate low-risk ‘alpha’, making it im-

Mitigate risk with SimCorp Dimension

9


Mitigate risk in the asset management industryCHALLENGES SIMCORP DIMENSION SOLUTIONS

Avoiding unreliable quantification of risk due to

disparate systems for position data, valuation and

key ratio calculations

All position data is available across asset classes and the same risk

models can be applied to all data, thus enabling correct and consistent

quantification of risks

Eliminating compliance breaches and errors

arising from manual reporting on risk figures and

level of exposure

Fully automate reporting to clients, management and authorities,

reducing the risk of compliance breaches and manual errors

Difficulties in measuring the risk impact of

proposed investment decisions due to the low

quality of enterprise data

Integrated solution – a single-database system with no need for interfaces or

duplication of data, using the same set of data throughout – minimises the

risk of having investment decisions carried out on incorrect information

Lack of transparency caused by utilising various systems

on disparate platforms throughout the enterprise

All functionality needed for different business functions in an integrated

system creates transparency and eliminates a 'black box' risk management

solution

Avoiding errors in manual workflows and

transfer of data

Internal and external STP processes reduce the need for manual processes

and consequently the number of human errors

Achieving transparency in counterparty exposures A transparent and complete overview of the counterparty

exposures in the complete range of instruments as well as in collateral

management and securities lending activities

Ongoing system maintenance and keeping

the system up to date

Semi-annual product releases, expert support and, where possible,

automated upgrade, validation and testing procedures minimise the

risks in ongoing system maintenance and upgrades

portant to optimise many kinds of risk-adjusted perform-

ance figures. The ability to measure, assess, monitor and

manage market risk is therefore a critical decision tool for

asset managers, who are increasingly being required to

report exposure and advanced market risk measures to

clients and authorities at short notice. Since market factors

are often correlated and results are thus not additive, a

reliable statement of market risk requires a consolidated

approach in which all positions and risk factors are eval-

uated simultaneously. SimCorp Dimension provides this

capability.

Automated risk management

SimCorp Dimension provides asset managers with real-

time access to all position data across asset classes, along

with a broad range of market risk assessment models and

key ratios which can be applied to any level of the portfolio

structure and at any stage of the investment process. As a


10

result, asset managers are able to report on a broad range

of key risk ratios based on industry standard methodologies.

Additionally, compliance limits can be configured to ensure

that risk levels are kept within predetermined limits, with

automatic notification as limits are approached or exceed-

ed. Furthermore, SimCorp Dimension’s risk solution calcu-

lates all key risk measures and ratios transparently, with a

range of customisable options, while offering stress test

scenarios and full back-test capabilities.

Outsourcing and data consolidation

The trend towards outsourcing of back-office administra-

tion and other non-core business functions, while creating

the opportunity to save costs, can hinder the process of

position data consolidation across internal and external

systems and may lead to a so-called ‘black box’ risk man-

agement function. SimCorp Dimension’s extended enter-

prise data management capabilities allow asset managers

to consolidate all relevant data in a single, comprehensive,

enterprise-wide database and leverage the SimCorp

Dimension risk solution for the timely and accurate

calculation and reporting of risk measures and ratios,

regardless of the number of systems providing input.

Manage operational riskA certain degree of operational risk is inherent in many of

the complex processes that form the core of any asset man-

ager’s business, requiring an active risk management culture

along with a number of measures designed to minimise the

potential impact. Manual processes are, by their very na-

ture, subject to human error, and decision-making based

on incomplete or inaccurate data can lead to incorrect

investment decisions. Additionally, an asset manager’s IT

infrastructure, which tends to grow in complexity over

time, can itself become a significant source of operational

risk, should it not deliver validated, accurate, consolidat-

ed and timely information to clients, decision-makers

and authorities. Furthermore, the lack of control proce-

dures can significantly increase the risk of errors or, even

worse, hide the incidence of fraudulent behaviour.

Mitigate risk with straight-through-processingSimCorp Dimension’s enterprise-wide process automation,

also known as straight-through-processing or STP, is the

fully automated process and data flow from front to back

office and back to front office, where human intervention

is only required for decision-making and exception-handling


11

purposes. Further, all participants in the operation, regard-

less of their role in the process chain, can rely on the data

being up to date and high in quality. Additionally, SimCorp

Dimension is equipped with sophisticated data connectivi-

ty, communication and validation capabilities that extend

the STP concept beyond internal processes and into a

multitude of external front office and back office process

flows.

In this way, SimCorp Dimension offers asset managers a

‘single version of the truth’, with the same set of data

being used in investment execution by the asset manager as

by the compliance officer, and the risk manager and all oth-

er middle and back office functions. Having only one set of

data across the system significantly reduces or eliminates

many of the operational risks associated with manual proc-

esses and the traditional IT infrastructure. Finally, SimCorp

Dimension’s comprehensive user authorisation and control

systems ensure that system users only have access to the da-

ta and functionality needed for their daily work. Automated

escalation procedures implement the so-called ‘four-eye

principle’, ensuring that transactions that exceed a user’s au-

thority are validated by more senior staff prior to execution,

minimising the opportunities for non-compliant activity.

Mitigate operational risk with SimCorp Services

The high degree of regulation and constantly changing

market conditions necessitate a never-ending stream of

system changes for most asset managers. For over ten years,

SimCorp’s perennial guarantee has delivered and continues

to deliver two major system releases per year, ensuring asset

managers are compliant in a timely manner while delivering

new and improved system functionality to meet changing

market requirements. However, with each new release of

SimCorp Dimension, the upgrade process can present a

number of challenges, potentially leading to increased opera-

tional risk, opportunity costs, unforeseen costs, quality issues

and delays. SimCorp’s Release and Deployment Management

Services offer end-to-end upgrade processes with a minimum

of operational risk and downtime, handling the entire project


“Middle off ice staff are extremely happy with the risk management features they have.” Claudio Peter Prutz, Head of IT & Operations, MEAG

12

Want to learn more?

with strict planning and budget control in order to decrease

overall cost while increasing quality.

To meet the challenges following a re-configuration or imple-

mentation of new functionality, asset managers can call on

SimCorp Validation and Test Management Services, who

offer certified consultants who provide expertise as well as a

range of automated processes for optimal validation and test

activities. This best-practice-based service ensures that test

methods and procedures are right the first time, thus saving

resources and reducing the risk of and costs related to system

downtime. An additional benefit is the fact that test cases are

reusable, which saves time and effort in future upgrades.

Mitigate counterparty riskThe default of a business partner or counterparty can, in a

worst-case scenario, be catastrophic and at best very costly.

The accumulated risk toward any specific counterparty,

which can span many agreements, includes every piece of

business with that organisation, ranging from equity posi-

tions in the organisation’s stock, unsettled trades and

derivatives contracts with the organisation to derivatives

contracts with underlying assets issued by the organisation,

lending agreements, cash and security collateral, bond

issues and so on. Adding to this, a complicated systems

environment can make the collection and consolidation

of accurate counterparty data virtually impossible, with the

potential result that the true impacts are unknown should

a counterparty default.

SimCorp Dimension’s single-database architecture can

consolidate all position data system-wide, using the same

valuation models for consistency in calculations and

enabling extensive credit risk management capabilities.

The system incorporates a number of powerful key ratios,

such as ‘Loss Given Default (LGD)’, which utilise the full

overview of all direct and indirect agreements and provide

an accurate and consolidated view of counterparties.

SimCorp Dimension also incorporates extensive collateral

management capabilities, allowing asset managers to easily

obtain an overview of all collateral and market positions,

the transactions and what has been agreed in the Credit

Support Annex (CSA), e.g. the margin call conditions and

eligible collateral.

‘Understanding the financial crisis: investment, risk and governance’

‘Report on Global Investment Management Risk Survey 2009’

‘Time to rethink risk management?’

Find more information about risk management at www.simcorp.com/mitigaterisk and order the book ‘Understanding

the financial crisis: investment, risk and governance’, published by SimCorp StrategyLab, at www.amazon.com or

www.amazon.co.uk.


13

Integrated Investment Processing with SimCorp Dimension

SimCorp Dimension allows asset management organisations to pre-define their generic investment strategies,

asset allocation decisions, compliance limits and benchmarks, completely automating processes from initial

asset allocation through to the actual buying or selling of individual securities. Furthermore, as new or existing

clients add or change mandates, SimCorp Dimension will also automatically make certain that individual asset

allocation requests and limits are applied, ensuring that the resulting trades are completely in alignment with

both internal investment strategies and client requests. This unprecedented level of automation, also known

as Integrated Investment Processing, offers investment management organisations the option of consolidating

the resources that manage portfolios to be more in line with corporate asset management strategies, with the

potential to significantly scale the business with existing headcount, or alternatively maintain business activity

with significantly reduced headcount requirements and thus lower the labour cost base.

Integrated Investment Processing with SimCorp Dimension

SimCorp Dimension’s Integrated Investment Processing allows asset managers to:• focus on core competencies, for example portfolio performance analysis, stock picking and investment

management decision-making;

• utilise the Integrated Investment Processing structures as the basis for structuring both risk and performance

analysis, conferring significant savings in administering portfolios across the enterprise;

• reduce operational errors and associated costs by providing a comprehensive overview.


INVESTMENT PLAN

OPERATIONS

Investor Mandate 1 Asset class n Security 1

Mandate 2 Asset class n Order

Investment decision

Pre-tradecompliance

Trade

Confirmation and settlement

Corporateactions

Client and legal reporting

Accounting

ReconciliationPerformanceRiskPost-tradecompliance

Security 2

Mandate 3 Asset class n Security 3

Security 4

Security n

Mandate n

INVESTMENT DECISION PROCESSINGMODEL PORTFOLIO

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Reduce cost with SimCorp DimensionIn the intense competitive environment inherent in the asset management industry, asset managers are compelled to develop new and improved products as a means to attract new clients. Coupled with this is a constant pressure on cost levels as both regulators and clients demand more stringent risk management protocols, suff icient liquidity and position coverage, and greatly increased expectations concerning transparency.

Cost reduction throughout the organisation Cost management has become not only a necessity, but an

integral part of the strategic fabric of many asset manag-

ment organisations, holding a crucial role in ensuring con-

tinued profitability. SimCorp Dimension supports these

organisations with a range of innovative capabilities that,

among other things, reduce personnel requirements,

eliminate manual processes and minimise exception

processing.

Crucial focus on operational costsA crucial ingredient of any cost management initiative is

high quality data, which ensures that investment and other

decisions are based on the best possible premise. However,

the greater the complexity of the system environment, the

greater the effort required to validate, consolidate and

reconcile data before analysis can even commence. Conse-

quently, the already high cost of providing analyses can be

exacerbated by errors, exception processing and unneces-

sary iterations in decision processes.

Reduce cost with SimCorp Dimension

15


Reduce operational costs with integrated investment

management software

SimCorp Dimension’s straight-through-processing capabili-

ties and single database architecture not only help to

lower operational risk, but also to minimise operational

costs significantly. The need to validate and reconcile

data from disparate systems is significantly reduced or

eliminated, and data accuracy can be guaranteed, thus

ensuring that analysis and reporting is based on the best

possible foundation. Straight-through-processing also

virtually eliminates manual processes and consequently

the number of processing errors, significantly reducing

staff requirements to support the business. Furthermore,

its open architecture enables SimCorp Dimension to inte-

grate and reconcile data with other systems if and when

needed, to achieve consistent and accurate performance

measurement as well as generate accurate client and in-

ternal reports.

Reduce cost in the asset management industry CHALLENGES SIMCORP DIMENSION SOLUTIONS

Increasing operational cost of maintaining disparate

systems for different business functions like risk manage-

ment, accounting, reporting etc.

One integrated solution, offering enterprise-wide func-

tionality based on a single database reducing operational

costs

Growing cost of using different systems to comply

with various local tax and accounting standards

Utilising one set of data throughout the system reduces

costly duplicate manual processes and also avoids the

need to train staff on multiple systems

Rising cost related to maintaining external interfaces Minimise usage of external interfaces, thereby reducing

the costs related to maintaining them

Human errors due to manual processes Automation of labour–intensive processes reduces human

errors and related costs

Additional resources required for manual

creation of reports

Automated reporting functionality significantly reduces

operational costs

Lengthy and costly software implementations SimCorp Services offer experienced business consultants

to help optimise system usage, train client staff and

leverage industry best practises


16

SimCorp Services help optimise processes

SimCorp Services are provided by experienced senior

SimCorp business consultants who work closely with

clients to understand their detailed needs and business

parameters, and to help define new and optimise existing

processes that incorporate anticipated system usage. By

doing so, SimCorp helps reduce operational costs by

making sure the system is utilised in the best way to

optimise an asset manager’s workflows, for instance to

process transactions and perform end-of-period portfolio

valuations. SimCorp continually expands its services offer-

ings to incorporate new developments in both industry

best practices and the semi-annual SimCorp Dimension

releases.

Reduce labour costs with SimCorp DimensionNo matter how talented the staff, if they do not have a

complete set of tools to support daily processes in a timely

and efficient manner, they are unable to focus on their

core competencies. It is an unfortunate fact that many

asset managers suffer from complicated, poorly inte-

grated systems environments that necessitate the dupli-

cation of data and processes which tend to be labour

intensive, manual and highly error prone.

Automated processes eliminate manual errors

SimCorp Dimension helps asset managers significantly

reduce costs through automation of labour intensive and

manual processes. This allows staff to focus on their core

competencies and the more complicated exception hand-

ling procedures. SimCorp Dimension captures data once

and then reuses it throughout the system, which reduces

the costs related to manual data entry and maintaining

interfaces between disparate systems.

Additionally, SimCorp Dimension allows asset managers to

pre-define their generic investment strategies, asset alloca-


17

Want to learn more?

Reduce labour costs with SimCorp Services

SimCorp’s Incident and Problem Management Services

address the challenges met by SimCorp Dimension clients

regarding efficient management of one-off incidents.

SimCorp provides certified consultants for particular events

ranging from covering the absence of a critical staff member

to taking over first-level support entirely. The potential cost

savings achieved in terms of in-house overhead are clear,

while even greater benefit derives from the wealth of

knowledge and experience SimCorp consultants accrue

from working constantly with SimCorp Dimension opera-

tions issues.

‘Operational control in asset management: processes and costs’

‘Report on Global Investment Management Cost Survey 2009’

‘Strategic cost management with SimCorp Dimension’

To gain more insight into strategic cost management, go to www.simcorp.com/reducecost and order the book

‘Operational control in asset management: processes and costs’, published by SimCorp StrategyLab, at

www.amazon.com or www.amazon.co.uk.


tion decisions, compliance limits and benchmarks, com-

pletely automating processes from initial asset allocation

through to the actual buying or selling of individual securi-

ties.

This unprecedented level of automation, also known as In-

tegrated Investment Processing, offers investment manage-

ment organisations the option to consolidate the resources

that manage portfolios to be more in line with corporate

investment management strategies, with the potential to

significantly scale the business using existing headcount, or

alternatively to maintain business activity with significantly

reduced headcount requirements and consequently lower

the labour cost base.

“SimCorp Dimension has allowed us to automate many routine tasks, such as producing reports. It is an extremely flexible system.”Claudio Peter Prutz, Head of IT & Operations, MEAG

18

Enable growth with SimCorp DimensionAsset managers can realise growth in a number of ways: through organic strategies such as product differentiation and low-cost leadership, accelerated growth strategies invol-ving entering new geographical markets or mergers and acquisitions, or a combination of these strategies. To be successful, asset managers require an investment management system that supports expansion while minimising a corresponding increase in cost.

Create value through scalability, cost reduction and product innovationSimCorp Dimension is a comprehensive investment man-

agement system offering asset management organisations

unprecedented flexibility, scalability, functionality, usabili-

ty, performance and reliability in a highly configurable and

fully integrated modular solution and is uniquely capable

of supporting an asset manager’s current and future stra-

tegic and tactical initiatives, facilitating years of growth.

Value creation through innovationAsset managers that choose a product innovation strategy,

also known as a differentiation strategy, focus on offering

significantly differentiated products and services to the

market compared to competitors, which in turn can help

retain existing and attract new clients. Keys to success for

this strategy are broad instrument coverage and the ability

to support new and changing investment and product

strategies in a timely and efficient manner.

Enable growth with SimCorp Dimension

19


Enable growth in the asset management industry

CHALLENGES SIMCORP DIMENSION SOLUTIONS

Insufficient coverage of financial instruments curtails

product innovation

Support for an innovation-driven growth strategy through an

extensive coverage of financial instruments

Manual processes limit the ability to provide

low-cost offers to the market

Unparalleled number of automated processes and STP flows

that allow asset managers to significantly reduce costs related

to manual errors

Managing non-standard and exotic instruments XpressInstruments enable rapid implementation of complex

and non-standardised instruments and can be included in

portfolio modelling

Increasing volumes and complexity without increasing

cost

New products, new clients and higher transaction volumes can

be accommodated without a corresponding increase in cost

Complying with local requirements when entering new

markets

New tax and accounting standards and reporting require-

ments can be accommodated without additional investments

in development

Maintaining a high competency level of staff when add-

ing new instruments or entering new markets

SimCorp Services offers Educational Services that include Prod-

uct Training, SimCorp Certification and End-user Training.

“The best thing is that previously any new business requirement involved another add-on system or a complicated work-around, but implementing SimCorp Dimension has opened up the whole of the front and back off ice for us so we have a lot more flexibility in

the business... Overall, we can be more forward-looking with the system we have now.”Jan Weber, CFO, DIAM International


“The best thing is that previously any new business requirement involved another add-on system or a complicated work-around, but implementing SimCorp Dimension has opened up the whole of the front and back off ice for us so we have a lot more flexibility in the business... Overall, we can be more forward-looking with the system we have now.”Jan Weber, CFO, DIAM International

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SimCorp Dimension is designed for innovation

Core to SimCorp Dimension’s effectiveness as an advanced

and flexible enterprise solution is its broad and comprehen-

sive instrument coverage, coverage which extends through-

out the investment management process: front, middle

and back office. From initial contract to final maturity,

SimCorp Dimension takes care of maintaining the state

and history of all instruments and events. In addition, all

operational processes relating to instruments and events

are transparent, with information automatically available

to all other business functions, such as front office analy-

sis, performance measurement and cash management.

“With SimCorp Dimension’s auto-mated, scalable STP processing and improved audit trail, I have great expectations to DnB NOR Asset Management’s corporate actions processing during future increases in business volume and activity on emerging markets.”Yngve Andersen, Head of Settlement, DnB Nor

Support for complex instruments

Many asset managers, however, have moved beyond

standard instruments and now include structured prod-

ucts, exotic derivatives and hybrids in their investment

strategies. To accommodate these instruments, SimCorp

Dimension incorporates XpressInstruments, a seamlessly

integrated tool which allows support for complex and

non-standardised instruments to be added rapidly. Such

support includes automation of operational processes,

e.g. confirmations, fixings, payments and deliveries, as

well as prompts for option decisions. Therefore, positions

that were previously managed on spreadsheets can now

be handled within SimCorp Dimension alongside standard

exchange-traded and OTC products in a single seamless

environment.

The time required to implement this kind of support for

a new instrument is very short, and the operational risk

associated with the use of such instruments on spread-

sheets or other tools outside the organisation’s core pro-

cessing system is eliminated. As a single framework solu-

tion, SimCorp Dimension enables access to portfolio

overview tools in one seamless front-to-back system. In

addition to support for operational processes, XpressIn-

struments support multiple market-tested pricing and

valuations models delivered by FINCAD™. More models


21

are added as market requirements change and can be

used for new and existing instruments immediately.

Educate to enable growth

To ensure that SimCorp Dimension supports innovation in

an optimal manner, SimCorp Services offers Educational

Services that include Product Training, SimCorp Certification

and End-user Training. Utilising these Educational Services

will enable organisations to leverage SimCorp Dimension

capabilities quickly and efficiently, thus reducing time-to-

market for new innovations, products, services and other

catalysts for growth.

Scalability: a key ingredient to growthTo accelerate growth, some asset managers choose to

enter new markets, add additional products to the plat-

form or enter into merger or acquisition transactions.

The scalability of the investment management system

plays an important role in these processes and can sig-

nificantly impact the profitability of new ventures.

Scalability with SimCorp Dimension

SimCorp Dimension enables asset managers to limit la-

bour costs and handle additional clients while maintaining

service levels. Furthermore, SimCorp Dimension is highly

flexible with respect to the amount of holdings, portfoli-

os, scenarios and strategies that can be managed within

the system and, as a result, new portfolios and products,

new tax and accounting standards, reporting requirements

and higher transaction volumes can be accommodated

without a corresponding increase in costs.

“We’re confident we’ll be able to adapt to changing requirements of our clients, no matter how demanding they might be.” Jan Weber, CFO, DIAM International

SimCorp Dimension is a strategic platform that can assist

asset managers in the case of mergers and acquisitions.

Comprehensive connectivity and communications capabili-

ties, including data import and export, data filtering, data

translation, data validation, and externally triggered online

and batch processing, combine to make most integration

tasks a configuration exercise rather than programming.

Additionally, SimCorp Dimension’s comprehensive data

model and its extensive enterprise-wide functionality

means that consolidation of legacy systems into SimCorp


22

Dimension is always an option in the short, medium or

long term. These facilities form the basis of its robust

extended enterprise data capabilities, and SimCorp

Dimension is therefore able to meet all the demands

an IT department typically faces after a merger, regard-

less of the system strategy chosen.

Growth through low-cost leadershipAsset managers that follow a low-cost leadership strategy

are constantly reviewing their operating models and look-

ing for opportunities to optimise the cost of production.

Information technology holds a central role in this strategy

by eliminating error-prone manual processes, which typically

offers a rapid and significant return on investment.

Automate processes to achieve low-cost leadership

SimCorp Dimension provides an unparalleled number of

automated processes and STP workflows that allow asset

management companies to significantly reduce costs. The

automated processes, with exception management as the

only manual intervention, can be applied from front office

to back office, which drastically reduces the costs involved

in managing client mandates. SimCorp Dimension’s clear

and open database design means that diverse reporting re-

quirements, such as solvency reports and periodic financial

statements for regulators, can easily be met.


23Enable growth with SimCorp Dimension

Want to learn more?

To learn more about growth enabling strategies, visit www.simcorp.com/enablegrowth and

order the book ‘Growth and value creation in asset management’, published by SimCorp StrategyLab,

at www.amazon.com or www.amazon.co.uk.

‘Report on Global Investment Management Growth Survey 2010’

‘Enable growth with SimCorp Dimension’

‘Growth and value creation in asset management’

24

SimCorp Dimension supports the investment processing needs of the asset management industry

SimCorp Dimension for the asset management industry

Portfolio management

Fund management

Pre-check compliance

Investment

management

strategies

Start of period

Corporate actions

Back office transactions

Reporting Trading

Benchmarking

Rebalancing

Orders

Asset management workflow

The fully integrated SimCorp

Dimension solution automates

asset management workflows

across the front, middle and

back office.


While asset managers tend to follow a regular and predict-

able set of processes to satisfy stakeholder and regulatory

obligations, there are times when asset managers need to

adjust standard workflows and processes to meet their unique

business needs and gain a competitive advantage. From

modelling trades and placing orders, through compliance,

25


Data qualityReconciliation control

Valuation process End- of-period

Matching Distribution Post-check complianceMarket data validation

Settlement Performance

Reconciliation

Fee management

Risk analysis

Cash management

Tax figures

End-of-period

Collateral management and

securities lending

Legal reporting

Management reporting

Client reporting

Asset management workflow


risk and performance checks and on to settlement,

accounting, reporting and connecting with external data

providers, the highly automated and fully integrated

SimCorp Dimension system enables asset management

companies to grow and capture market share.

26 SimCorp: global investment management software developer of the future

SimCorp: global investment management software developer of the futureChoosing an investment management platform is no trivial matter. SimCorp understands that a decision to invest in SimCorp Dimension will impact a client’s business for many years to come.

Introducing SimCorpSimCorp enables global investment management organi-

sations to mitigate risk, reduce cost and enable growtht

hrough development and implementation of its integrated

and market-leading financial software solution SimCorp

Dimension.

Solid foundation Founded in 1971, SimCorp has decades of experience

in developing solutions for the financial sector. Head-

quartered in Denmark and with subsidiaries throughout

Europe, North America and Asia Pacific, SimCorp is list-

ed on NASDAQ OMX Copenhagen A/S stock exchange

and has a continuous track record of creating value for

its clients, shareholders and employees alike.

Cutting edge SimCorp’s clients include financial institutions, asset

managers, insurance companies, pension funds, mutual

funds, banks and mortgage lenders, all of whom rely on

SimCorp’s ability to constantly be at the cutting edge of

developments in the investment management industry.

More than 170 satisfied clients worldwide will tell the

same story: working with SimCorp creates solutions

that support both current and future business needs. With

SimCorp, clients have a reliable partner who understands

their organisation’s business needs and provides value-add-

ed services to their business. Long-term strategic client rela-

tions and a dedicated commitment to supporting clients’

business are fundamentals of the SimCorp business model.

Perennial guarantee An indispensable prerequisite for our clients’ future devel-

opment is SimCorp’s ability to develop, maintain and pro-

vide an innovative product which, by virtue of unique and

timely functionality and quality, will allow our clients to

keep pace with an ever-changing market characterised

by stricter investment management process requirements.

With semi-annual releases containing new functionality,

SimCorp grows with its clients and the demands of the

market – and it is SimCorp’s perennial guarantee never to

offer its clients an outdated solution.

Superior know-how More than 1,100 enthusiastic employees worldwide are

focusing all of their efforts on a single investment man-

SimCorp headquarters in Copenhagen, Denmark

27

Want to learn more?

To learn more about

SimCorp’s financial

performance, download

its latest annual report

at www.simcorp.com/

financialreports.

SimCorp: global investment management software developer of the future

SimCorp: global investment management software developer of the future

agement system: SimCorp Dimension. Their core compe-

tencies are in economics, finance and IT, and serving as

the strategic foundation of SimCorp’s business activities,

this experience will constantly be expanded. Almost 25%

of SimCorp’s revenue is re-invested in research and sys-

tem development related tasks, which is our clients’ guar-

antee that SimCorp is relentlessly dedicated to providing

truly advanced solutions and services.

0

100

110

120

130

140

150

160

170

180

Revenue190

200

1,00

0 EU

R

50

50

45

40

35

30

25

20

15

22

3438

40

10

5

0

90

40

80

30

70

20

60

10

2005 2006 2007 2009

2005 2006 2007 2009

102

127

156

180

2008

174

SimCorp Revenue EURm EBIT EURm

Development cost related to revenue in %

38

2008

Profit from operations

(EBIT)

2005

Development costrelated to revenue

2006 2007 20092008

0

25

10

20

5

15

20.9 20.522.1

24.6 24.6

Development in SimCorp’s financial performance 2005–2009.

SimCorp’s financial performance, 2005-2009

28

Ingo Walter, Director of SimCorp StrategyLab, is Vice Dean of Faculty and Seymour Milstein Professor at the Stern School of Business, NYU. Professor Walter has had visiting professorial appointments worldwide and remains a Visiting Professor at INSEAD in Fontainebleau, France. Professor Walter's principal areas of academic activity include international trade policy, international banking, environmental economics and economics of multinational corporate operations.

SimCorp StrategyLab

Thought leadership in investment management: SimCorp StrategyLabIn direct response to a new agenda in the investment management industry with increased focus on risk management, cost control and growth opportunities, SimCorp established its independent research institution, SimCorp StrategyLab, in December 2008. Through its extensive research and know-how, the institution’s aim is to provide insight into some of the many challenges facing professional asset managers throughout the world. Going forward, SimCorp StrategyLab will continue to seek to suggest ways to meet these challenges and to share best practices.

To find appropriate solutions and to gather relevant best

practices for the top strategic institutional levels of the

investment management industry, SimCorp StrategyLab

carries out its own research and analysis of trends and

challenges in the financial sector. The research programme

is carried out in close collaboration with internationally

recognised academics and established industry experts. As

a result, SimCorp StrategyLab is able to provide competent

29

Want to learn more?

Mission

The mission of SimCorp StrategyLab is to contribute

to identifying ways of mitigating risk, reducing cost

and enabling growth in the global investment

management industry.

Vision

The vision of SimCorp StrategyLab is to become

a renowned and trusted thought leader in the

investment management industry through the

contribution of applicable research and knowledge

in matters of strategic importance for IT and

investment management.

SimCorp StrategyLab conducts research that applies

to strategic levels at global asset management

companies. The research is aimed at finding ways to

allow asset managers to mitigate risk, reduce cost

and enable growth, with efforts focused on defining

industry best practices. For the 2010-2011 research

programme, a team of leading thinkers in the

academic world and the financial industry has

been gathered by SimCorp StrategyLab especially to

examine the interactions between the challenges and

best practices in the asset management industry.

SimCorp StrategyLab

Thought leadership in investment management: SimCorp StrategyLab

suggestions for best practices which are intended to mini-

mise risk, find ways to achieve sustainable cost savings

and enable growth.

OrganisationSimCorp StrategyLab is formally organised under the

management of a board of directors. The chairman of

SimCorp StrategyLab’s board is the CEO of SimCorp,

Peter L. Ravn, Ph.D. SimCorp StrategyLab is headed by

the renowned Dr. Ingo Walter, Seymour Milstein Professor

at the Stern School of Business of New York University,

who is in charge of the research institution’s academic

affiliations and oversees the quality of its research work

and related activities. Along with SimCorp StrategyLab’s

partners, and building bridges between theory and prac-

tice, are leading academics, industry experts and execu-

tives who contribute to its research programme and other

activities.

Download the profile brochure at www.simcorpstrategylab.com to learn more about the vision and mission of SimCorp StrategyLab.

Go to www.simcorpstrategylab.com to learn more about SimCorp StrategyLab’s research programme and activities.

30

Legal notice

The contents of this publication are for general informa-

tion and illustrative purposes only and are used at the

reader’s own risk. SimCorp makes all reasonable endea-

vours to ensure the accuracy of the information. Howev-

er, SimCorp does not guarantee or warrant the accuracy

or completeness, factual correctness or reliability of any

information in this publication and does not accept liability

for errors, omissions, inaccuracies or typographical errors.

The views and opinions expressed in this publication are

not necessarily those of SimCorp.

© 2010 SimCorp A/S. All rights reserved. Without limiting

rights under copyright, no part of this document may be

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Contact information

About SimCorpSimCorp enables global investment management organi-

sations to mitigate risk, reduce cost and enable growth

through development and implementation of its integrated

and market-leading financial software solution SimCorp

Dimension. SimCorp is headquartered in Copenhagen

with subsidiaries and branches in Amsterdam, Brussels,

Frankfurt, Helsinki, Hong Kong, Kiev, London, Los Angeles,

Luxembourg, Munich, New York, Oslo, Paris, Singapore,

Stockholm, Sydney, Toronto, Vienna and Zurich.

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