SimCorp’s New Machine Learning Offer Strengthens PenSam's Operational Capabilities for Alternative Investments
March 7, 2023, COPENHAGEN, DENMARK
SimCorp, a provider of SaaS (Software as a Service) investment management solutions, is pleased to announce that pension fund PenSam is live on the new machine learning offer Intelligent Document Processing on the platform SimCorp Dimension.
Intelligent Document Processing automates the extraction of unstructured data from private market funds, which has historically been a manual and labor-intensive task for investors. The reason is the nature of the data from alternative investments, which investors typically receive in various forms and formats, typically PDFs.
According to Hugues Chabanis, Vice President of Innovation at SimCorp, by using the latest advancements in machine learning technology, SimCorp’s vision is to fundamentally change how investors process unstructured private markets data.
“By applying machine learning techniques, we can identify key data points and structures, interpret them for extraction and automatically input them into SimCorp Dimension for downstream processing,” Chabanis says.
“The rise of machine learning applications such as ChatGPT and OpenAI has been an eye-opener for many people in terms of the maturity of machine learning technology, and we’re delighted to strengthen our partnership with PenSam, which is considered a pioneer in its adoption of technology in the investment process,” Chabanis adds.
Freeing up resources
Intelligent Document Processing uses a detect-select pattern to process accounting and investor data such as Capital Call and Distribution notices. The model contextually identifies key data points within the document, organizes it based on pre-trained learnings, and extracts the relevant data for downstream processing as part of an end-to-end workflow.
By automating data gathering, Intelligent Document Processing enables investment professionals to spend more time on value-adding activities, for example, optimization of asset allocations and performance, rather than manually copy-pasting rudimentary information.
“When we started this initiative, we found that clients struggled not only with data extraction but with the end-to-end workflow and validation required to process the data,” Chabanis, and continues:
“Therefore, we’ve developed a comprehensive workflow tool that empowers the user over the entire life-cycle of processing transactions. This includes data extraction but also automated reconciliation checks that compares what the fund manager is reporting to SimCorp Dimension, which goes a long way in ensuring data quality and eliminating mistakes.”
PenSam: Strengthen our operational capabilities
Over the past decade, asset owners like pension funds and insurance companies have significantly increased their allocations to private markets to diversify and return-enhance their portfolios.
PenSam has EUR 22.8 billion in assets under management, of which alternatives have reached EUR 6.7 billion, representing nearly 30 percent of their entire investment portfolio.
“With the implementation of SimCorp’s Document Processing Technology, PenSam continues to strengthen our operational capabilities with a focus on automating capital calls and distribution notices for alternative investments,” says Thomas Anker, Application Manager at PenSam.
In 2019, when PenSam’s alternatives assets totaled EUR 4 billion, the pension fund went live on SimCorp Dimension’s Alternative Investment Manager to improve investment operations. PenSam has since helped provide insights into developing the new machine learning offer.
“The effort to tackle the industrywide issues with structuring and automating flows based on unstructured data has been underway for a long time and is the latest of many results that the development partnership between PenSam and SimCorp has harvested throughout the last years,” Anker says.
Allocations towards alternatives to keep growing
Globally, market intelligence firm Preqin predicts that assets within alternatives will reach USD 23.2 trillion by 2026, nearly doubling compared to the end of 2021, where the figure was USD 13.3 trillion. Private market funds will play a significant role in this growth trajectory.
If this forecast unfolds even partly, many institutional investors will need to assess whether their operating model is geared to handle the mushrooming amount of data from these private market assets.
Intelligent Document Processing is developed in partnership with New York-based data acceleration platform Alkymi.
“Alkymi is excited to partner with SimCorp to power their automation for private markets data with advanced machine learning and computer vision technology,” says Harald Collet, CEO at Alkymi.
“Since 2020, our deep integration with SimCorp Dimension has enabled leading firms like PenSam to accelerate their operations and push their digital transformation strategy forward,” Collet continues.
Intelligent Document Processing delivers institutional investors the following benefits:
· Remove arduous manual collection and processing of unstructured documents, including lengthy investor notices and quarterly or annual reports.
· Enable a highly efficient end-to-end workflow that makes data visible, accessible, and available when it enters the enterprise to provide real-time access to data insights.
· Facilitate more informed investment decision-making in the front office, a better understanding of portfolio risk and exposure, and faster reporting in the back office
· Eliminate the need for outsourcing, enabling firms to maintain exclusive control and security over the proprietary data that forms their vital edge, resulting in few people required to manage it, allowing for increased scale.
In the 2023 Global InvestOps Report, 200 buy-side executives across the world highlighted that the reduction of manual processes (52%) is the single most planned technology and operations initiative to support strategic priorities.
This was closely followed by improving data and operations support for multi-asset investment strategies (44%) and system landscape simplification (44%).
“The growing allocations to alternatives show no sign of slowing down, making investment portfolios increasingly complex and increasing the need for automation of extraction of unstructured data from private market funds. Intelligent Document Processing addresses this specific need and will be instrumental for institutional investors as they look to find more effective ways of working,” Chabanis concludes.
SimCorp offers industry-leading, integrated investment management solutions.
Our platform and ecosystem, comprising partners, services, and third-party connectivity empowers us to provide 40% of the world’s top 100 financial companies with the efficiency and flexibility needed to succeed.
With over 25 offices around the world, and more than 2,200 employees, we are a truly global, collaborative team that connects every continent and industry seamlessly.
PenSam is a Danish labour market pension fund. PenSam manages occupational pension schemes for people within eldercare, cleaning, technical service and pedagogical care in Danish municipalities, regions, and private companies.
Alkymi is the action layer between all of the data that flows into your business and the systems that support it. By putting advanced machine learning technology and powerful automation in the hands of business users, Alkymi helps leading organizations like Interactive Brokers, SimCorp and Strategic Investment Group accelerate decision making by allowing them to extract, analyze and take action on critical data found in emails and documents.
For more information, visit www.alkymi.io.
Søren Rathlou Top, Global PR & Communications Manager at SimCorp
+ 45 31 15 87 06