Automatic Data Processing, (NYSE: ADP) subsidiary ADP Wilco, has announced that its client Union PanAgora Asset Management GmbH is now operational with ADP’s Swift outsourcing services for its securities settlement operations.
Union PanAgora is an international joint venture of Union Investment and PanAgora Asset Management in Boston. With its active quantitative portfolio management approach, the company manages investments for institutional investors totalling EUR 8.4 bn. Having reported growth in excess of EUR 4.3 bn since the beginning of 2005, Union PanAgora is one of the fastest-growing companies in the institutional asset management market.
To automate its securities settlement processes and strengthen its straight through processing, it now relies on Swift-based communication with its business partners.
The Swift outsourcing service provided by ADP Wilco relieves Union PanAgora of the need to supply the infrastructure for the Swift network connectivity itself, and takes care of the ongoing updates in Swift standards.
"Before deciding on Swift we communicated with our business partners manually by fax or by Excel spreadsheet," explains Ingo Purwien, partner and Head of Investment Operations at Union PanAgora. "But given our rapid growth, we wanted to automate our communication with the 'Master KAGs'. [German umbrella fund management entities] and custodian banks and to boost our efficiency."
That's why Union PanAgora opted for standardised communication via Swift. "The Swift standard is gaining in importance in the marketplace, and the Master KAGs and custodian banks we work with are also making greater use of it. Swift supplies an automated communication service throughout the industry that is efficient and reduces costs as well as errors," said Purwien.
Rather than set up the IT infrastructure for the connection to the Swift network and acquire the necessary Swift know-how itself, the asset management firm utilises the Swift outsourcing service of ADP Wilco. "The Swift standard is constantly being modified and developed further. To stay on the ball, in terms of the requisite technology and specialist knowledge, calls for a large additional workload that we didn't want to burden our IT department with," says Purwien. "By selecting ADP Wilco we have the benefit of an experienced provider who assures us quick and easy access to Swift-based communications, thereby contributing to the automation of our securities settlement."
Since July 2006, all outbound messages to Master KAGs, and custodian banks that are involved in the firm's business operations, are sent in Swift format. By the end of 2006, incoming messages from other selected counterparties will also be communicated by Swift. "Next year we plan to harmonise the holdings information and exchange holdings reports with the Master KAGs and custodian banks via Swift to prevent position keeping from being performed twice, and to have a precise picture of our securities holdings at all times," said Purwien.