Speaker/Panelist - State Street Webinar: Enterprise Data Management as a Service

Audio Replay

The future is bright from a data perspective - Ra'ad

"Ra’ad, what’s your perspective on the endowment side? Take us through what you’ve experienced at MIT. 

Ra’ad: Data, data, data. This is the topic at hand. It’s very exciting – well I’ve always thought it was exciting when I was in asset management, asset servicing; now I’m [in] the asset owner side and maybe the rest of the world is finally catching up with us. So let me bring things at least from a MITIMco perspective. MITIMco is the MIT investment management company, has one client: MIT. We are a unit of MIT which was created to manage and receive investments of the institute’s endowment, retirement, and operating funds. As of June 30, 2018 we had approximately 25 bn of assets under management. So – our returns aren’t bad relative to the endowment space; we returned 13.5% for the 2018 fiscal year. And what we returned to MIT proper is significant – 23% of the institute's operating revenues come from support from investments. So it’s really important – a fantastic mission, an invigorating mission for the staff at MITIMco. So MITIMco, like many of our peers in the endowment space has a high touch process for two parts of the portfolio: on the one part there are the real estate holdings focused on Cambridge, MA where the mission there is to make sure that there is an innovation ecosystem, economic support to the institute, there are real estate investments, and also ensure that there is flexible space to accommodate the institute’s long term needs. We also have a high touch process to source, execute, and manage the investments that we have that come from gifting and from the results of our previous investments. So we support active managers that are global managers by being great partners, we source globally for exceptional people and investment opportunities, and we allocate capital on a bottom-up basis. So like AGI we also have tons of data at a different scale. We have many sources of data that come from our managers, our real estate activities, and also we complement that with other alternative data so we can get a fuller picture of what our exposures are, etc. They come to us at different levels of granularity, different time frames, different quality, respective so like the challenges that we all have faced in terms of data aggregation the mission was – actually, it was a strategic decision from MITIMco to complement this high touch approach on both the real estate and investment side to complement that approach with a bottoms-up insight across our investment and real estate portfolio from a data-oriented perspective. So when you have a mission like that, the traditional data aggregation challenges, we privates as well as public instruments and entities that we have to grapple with. There are industry standards that are better defined on the public instruments and entities, not necessarily so on the private side. There are alternative data sets that I mentioned before that we tried to use to complement the picture that we have of our portfolio, and of course we like everybody else, because of new technologies, have started to leverage structured and semi-structured data sources. What this translates into – I mean we’re not a very large group, we’re less than 100 people managing 25 bn of assets under management, but we believe we’re an effective group and want to leverage the staff fully. The principle is how do we maximize leverage of our internal staff and part of that is partnering with our key partners."

"I’m going to turn things to Ra’ad now and ask him to talk a little bit about the solutions that they’ve started to employ at MIT.

Ra’ad: Happy to do that. So there are some parallels with AGI, but again on a different scale. So if I had to compare the asset owner’s space vs the asset manager and asset servicing space, since I’ve had experience in all three – there are some different factors here that go into the data management function as a support of the business. The fact that we have one client makes things much simpler in terms of we don’t have to support many clients and the servicing around that, which is an important function and usually takes a big portion of the capacity of an organization. Second, we’re part of a non-profit educational institution so that regulatory scheme that we have to conform to is slightly different – we’re in one location, yes our managers are global, but we have one location so we have to worry about what our managers have to deal with. So it’s a slightly different problem. And finally, most of our investments are really done by our managers. Yes, we do have some direct investments, but that’s – and the last one is the number of sources that we have to deal with from a data perspective is manageable – they’re not hundreds or thousands, but they’re manageable. All of that, if you pull it together makes the situation for an asset owner and endowment space a slightly different problem – there are common issues, yes, you do have to aggregate data, you have to think of where you want your partners to do stuff that you may not see – that requires a lot of high effort, but that is important – but generic activities that an organization like State Street could do across all of its clients this way it allows us to use our capacity for stuff that is more specific to us. Also, there have been – I am a computer scientist so keeping track of technologies around data management appropriate to the business. So there is exciting evolution of course as we know moving from ETL to ELT meaning instead of extract, transform, and load we extract, load, and transform that way you keep your lineage allowing you much deeper insight into data quality and where it's coming from across all of your data sources – that’s really important for MITIMco in addition enrichment of the information that we have be it structured or semi-structured data. We use partners to, for example, enrich our data on top of our traditional administrative data across all of the services that we subscribe to at our partner, including market data feeds, additional Bloomberg data, etc. It’s fairly valuable to think of – let me step back, thinking of data as the service usually people think that that’s complete outsourcing, but we like to think of it as really the spectrum of solutions. So I urge everyone to think about that – one of the biggest challenges that we have is around privates market data instruments as well as entities. That’s a tougher nut to crack from the public – so there are entities and services that provide conversion of semi-structured data like private entity reports, making them into a structured form that many endowments including MITIMco subscribe to, we do some of that ourselves so we have other partners in that space and data sources that allow us to tackle that, but still it is an issue – you need identifiers in the privates space on the instrument as well as the entities side are still a challenge. I mean the closest thing across public and private instruments and entities to a universal identifier, as far as I know, is on the instrument side is probably the financial instrument global identifier or on the entity side is the Legal Entity Identifiers, LEIs which are more popular in Europe and Asia than it is in the US, that’s – hopefully the industry will help us resolve those issues – long time issues ... but I’m not going to hold my breath there"

"Thanks, and Ra’ad, you have some thoughts on the future, as well.

Ra’ad: The future is bright from a data perspective and its really exciting to be watching all these developments of new technologies for helping us manage data better, to provide better value for our businesses and entities and to have partners that also see the value in that approach. So, I am anticipating better and deeper insights into our holdings, especially the stuff that is currently not encoded in classifications; things like crypto-exposure or whatever is up next that wasn’t going to be able to do that leveraging the data that is available there. Machine learning also as an approach is all about the data there – talking about the dozen or two algorithms that have been around for decades that are tuned to leveraging data so our data management, data service will have to evolve to enable that whole lifecycle for machine learning which is likely different than what we’ve been used to, so I’m anticipating those platforms that are well-positioned to support that, the entities that will use that will be in a better position than others. And finally, Dick mentions data exhausts in the opening statement and I think of that as gold laying in plain sight – so how to tap it, structure it, plug it into your platform is really what’s going to differentiate each entity. Michael Porter has said that he’s very bullish on the leveraging data and the new approaches for data management, because until this point, we've been trying to do best practices as to what somebody else has done essentially drives away competition – strategic competition, but if you fuse available data for everyone with your own data then you are reintroducing strategic differentiation that you could leverage for a deeper insight whether it’s on the investment side or on the real estate side. I’m bullish on the future here."

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Description

Shifting from Data Operations to Data Analysis & Oversight 

Money managers and their data teams have historically prioritized "data operations" functions, such as connecting to data sources and ensuring correct formats, timely receipt, accuracy and delivery to downstream systems and warehouses – an effort that consumes significant resources and mindshare.

But the landscape is evolving.

Enterprise data management as a service (DaaS) has begun to transform how their resources and data are utilized. Relieving the organization of day-to-day data operations enables investors to:

• Spend additional time analyzing data
• Utilize data (and meta data) to drive investment decisions
• More strategically manage their business
• Support other requirements, including regulatory and board reporting 

Please join us on June 26th for a panel on the challenges and benefits of outsourced enterprise data management, during which large buy-side investors and investment managers will share their knowledge and experiences in selecting and implementing a solution.

Speakers:

• Richard Taggart, Executive Vice President, Head of Front-to-Back Platform Services, State Street
• Subbiah Subramanian, Senior Vice President, Head of DataGX, State Street
• Thierry Saintot, Director, Co-Head Enterprise Data Office, Global Head of Data Management (Operations), Allianz Global Investors
• Ra’ad Siraj, Director, MIT Investment Management Company (MITIMCo)