Jacobi Inc, an international investment technology provider with clients representing nearly £1.3 trillion in assets under management, is launching in Europe to help professional investment managers streamline their investment processes.
Jacobi’s system works by supporting top-down portfolio design and construction - not least because asset allocation is a major contributor to investment success, estimated between 40% and 100% of the variability of fund returns according to academics.
This makes it different from most other investment technology platforms, which focus on security-specific “front office” problems such as trading, liquidity and bottom-up risk measurement. Jacobi is taking aim at the top layer of investment management - multi-asset portfolio design and asset allocation.
The firm’s launch into the pan-European market comes after signing a number of large institutional investment managers, including USS, manager of over £60 billion in assets and the delegated investment arm of leading global asset consultant and outsourced Chief Investment Officer, Willis Towers Watson. Jacobi’s client base already stretches across the US, Asia Pacific and Europe, including sovereign wealth funds, pension funds, asset and wealth managers and asset consultants.
Tony Mackenzie, CEO and Co-Founder at Jacobi, says: “Jacobi puts top-down portfolio design at the heart. There are surprisingly few technologies that start from the basis of forward projections and ensuring an appropriate asset allocation strategy. We believe investment technology needs to reflect the client’s investment approach, not the other way around. Jacobi’s solution allows clients to customise the platform, such as incorporating their own investment models, risk engines, forward projections and dashboard needs. This allows them to integrate, scale and streamline their entire investment process.
“We have ambitions to expand our footprint across Europe, following a number of large client signings. We believe the current landscape of investment technology providers and in-house solutions is ripe for change.”
To lead its European operation, Jacobi has appointed former Fidelity International executive Curtis Evans. The firm is currently assembling a team of investment and software engineers for its London base, expanding on offices in San Francisco and Brisbane.
Jacobi’s technology is capitalising on the trend across the investment industry towards customised investment solutions. The platform has been designed to help clients scale their investment processes.
Curtis Evans, Managing Director EMEA at Jacobi, adds: “Many of our clients have developed highly sophisticated processes to customise investment portfolios. But scaling that soon becomes a technology challenge that we help them with.
“A lot of existing technologies start and end in the “front office” investment team. Instead, Jacobi helps to break down barriers that can exist and bring investment teams closer to the ultimate client. Therefore, we put huge emphasis on visualisation, dashboard and sharing features.”
Unlike most incumbent providers, Jacobi’s investment technology is white-labelled and allows users considerable flexibility, including the ability to adapt the platform and integrate with other providers and internal systems. And, at a time of increasing regulatory scrutiny, it can support greater transparency and client communication.
Steve Towers, Head of Asset and Liability Management at USS, states: “Our focus is solely on delivering the best investment outcome for our members. We have very well-established investment processes but are increasingly reliant on technology to manage the process on a large scale. Using Jacobi allows us to spend more time on the investment opportunities, not technology challenges.”
Chris Mansi, Global Chief Investment Officer for Delegated Investment Services at Willis Towers Watson adds: “We are delighted to work with Jacobi and utilise their technology in order to continue to scale our sophisticated processes for customising portfolios. In designing investment solutions for clients, our emphasis has always been firmly on the client’s objective and expected outcome, and to follow a total portfolio approach that views portfolio quality through multiple lenses, which neatly aligns with Jacobi's vision. As our business evolves and our client needs become increasingly complex, it's great to have a partner to help us ensure that our technology infrastructure and also the solutions we deliver to our clients remain best in class.”
Greg Faragher-Thomas, Director at Alpha Financial Markets Consulting, technology consultant to 75% of the world’s leading asset and wealth managers, states: “We constantly get asked how to improve risk management and controls around the way investment teams develop and implement their investment ideas and themes, with Jacobi we see a very comprehensive solution for ensuring investment decision lineage can be tracked between workflows, risk models and implementation tools. With the introduction of the FCA’s Senior Managers and Certification Regime around the corner, Jacobi is a rare product for assisting complex asset allocation workflows and ensuring transparency.”
Contributed | what does this mean?