With an established range of ETFs and a need to grow its business, FinEx had a critical need for software specialized in ETFs, with the ability to process index changes, portfolio rebalances, PCF creation and bursting. Initially a Charles River customer, FinEx partnered with Ryedale to implement its cloud-based Portfolio Management System. Through its software support for specialized index and ETF workflows, the system reduced cost and increased efficiency.
Three years after the launch of its first ETFs, FinEx seemed stuck with high servicing costs and low AUM. It needed to grow its AUM, possibly by innovating and launching new funds, but it also had to look for cost savings anywhere it could.
The Charles River platform had initially seemed a safe choice but there had been some frustration both with the functional scope and the cost. Besides the software license fee, additional fees were incurred for support and fixes. This made the total cost of ownership substantially higher. So, FinEx entered into an in-depth, ‘proof-of-concept' evaluation of Ryedale’s Portfolio Management System, with the objective of addressing these challenges.
Ryedale implemented the Index Portfolio Management, ETF, and Order Management modules in a Managed Service. Under the Managed Service, FinEx was able to focus on managing portfolios whilst Ryedale hosted the software and managed all technical and data-related services.
Ryedale’s Managed Service includes daily data checks, performance monitoring, security monitoring, deploying upgrades, keeping operating systems up to date with the latest patches, backups, keeping a disaster recovery system on standby, and deploying test environments as necessary.
Within the proof of concept, the Ryedale Platform was integrated with FinEx’s existing index vendors, fund accountants, price sources, futures brokers and electronic trading venues. Once this phase was completed, Ryedale’s development team identified some functional gaps and closed them. To complete the project, Ryedale and Charles River were run in parallel for two months before acceptance and go-live.
FinEx decided to completely replace Charles River with the Ryedale Platform. From starting the proof of concept to being able to decommission Charles River had taken seven months. The implementation achieved FinEx’s objectives:
A strong and collaborative working relationship has developed between Ryedale and FinEx. Ryedale made it a priority to understand FinEx’s business processes in-depth, and there is continuing open dialogue on product development and direction.
We knew the functions of the Ryedale Platform were a better fit for our indexed style of investment management, but the quality of the support has been a revelation. Every day, the support team at Ryedale verifies all the data feeds and checks that our funds look OK. If there is a problem, it is usually remedied before we start work and the problems we do experience are nearly always down to data vendors missing their SLAs, rather than with the software per-se.
Senior Portfolio Manager on the ETF team
Sean Kelly, Chief Technology Officer of Ryedale says: “Supportability has been a key design aim. We are used to writing software for large enterprises but when architecting Ryedale’s Platform, we knew we had to deliver a fully managed service and take responsibility for data operations. So, we designed excellent process-scheduling and monitoring capabilities and made full use of cloud services. We’re delighted this has resulted in such a good customer experience.”
Since implementing the Ryedale Portfolio Management System in 2016, Ryedale has supported FinEx’s growth in AUM through major events such as moving between custodians, changing index providers, and new fund launches.