Chief Executive’s Q&A
Q How does StatPro sell to prospects who have a competitor solution ingrained in their processes?Every company is looking to gain a commercial advantage and in the asset management business, that frequently comes down to the level of service that is provided to clients. If company A provides its clients with daily access to online analysis of their portfolios and company B only sends their clients standard reports once a month, two weeks after the month end (this is predominantly the current standard), then company B is in danger of losing business to company A. StatPro R+ and StatPro Revolution necessitates a rethink about processes and this applies to our prospects and clients alike.
Are there some clients of StatPro Seven who wouldn’t naturally migrate to StatPro R+?
When the cloud was first mentioned, many people said ‘never’. However, things are changing rapidly and most people can now see that architecturally and technically, cloud-based solutions are better for pretty much everything, including security. StatPro is proud to have Deutsche Bank and Credit Suisse Private Bank amongst its clients for StatPro Revolution and they would not have subscribed if they had concerns about security. Nevertheless, there are some organisations, such as sovereign wealth funds, that will be the most reluctant to make the switch. However, we believe that in a few years even they may well be ready for migration.
The path to revolution
Q What is the market perception of StatPro R+ creating ‘efficiencies’ for performance teams?
Currently the larger asset managers have quite large teams of performance measurers, yet all of them work on a monthly data production cycle. We believe that StatPro R+ will make it possible to flip that to a daily production cycle. That is more than a 20-fold increase in productivity (assuming weekends are excluded). There will be no need for them to have the IT infrastructure, nor to manage market data. A big change will be not needing to manage complex performance report production, but rather using StatPro Revolution’s self-service capability to improve client service. So roles will change, but the quantity of work may stay the same.
Q How can StatPro identify the tipping point for StatPro Revolution?
We cannot be certain when or if this might happen. What we do know is that by sheer hard work, we are getting more and more recognition in the marketplace. We have gone from being a relatively anonymous back office provider to a new name in the front office with a distinctive brand. We now need to translate that into hard currency, but that will also take more hard work. Judging by the huge increase in cold calling, webex calls and meetings, we are getting the message out to the market, but there is always more to do.
Q Will we change the $100 per month model for StatPro Revolution?
We already have four tariffs for portfolios: Platinum, Gold, Silver and Bronze. The price per portfolio, per month is $300, $100, $15 and $5. You have to buy Silver in packs of 10 and Bronze in packs of 50 portfolios. The distinction between the portfolio types is the level of functionality you get. In essence, the Silver and Bronze are suitable for the private wealth market and the Platinum and Gold portfolios are designed for the asset management and hedge fund community. We have no current intention of changing these price points, although volume buyers can get discounts on a per portfolio basis.
Q How is revenue affected by the realignment of the client services teams to StatPro Revolution?
We have seen the number of StatPro Seven clients adopting StatPro Revolution greatly increase in 2013 and we expect this to continue. StatPro Revolution enables our clients to extract more value out of their performance function and so the client service teams need to help our clients realise these gains. We have found that thanks to StatPro Revolution we are getting exposure to more parts of our clients’ businesses and, as we understand our clients better, so we can help them more. We expect the realignment of the client service teams to boost revenue.
Q Are the fund administrators happy with the price point of StatPro Revolution?
I think that we have established a price norm for portfolio analytics. It is a considerably lower price point than most other solutions can provide it for except for very high volumes of portfolios (and we offer volume discounts). Our fund administrator partners tend to pass on the cost of StatPro Revolution, but also charge a data management fee on top. This is perfectly reasonable from our perspective as there is a lot of value in managing the data properly. We hope that when StatPro R+ is fully ready, fund administrators will use it to provide additional services to asset managers.
14 March 2014