| London's Origin
Asset Management, a start-up investment management
firm focusing on UK and global equities, has contracted
HSBC
to manage its investment administration and custody services.
As reported in Waters'
sibling publication Hedge Fund
& Investment Technology, outsourcing back-office
functions to HSBC reflects Origin's strategy of focusing
on investment performance, client services and reporting
while seeking third-party support for non-core operations.
Lindsay Johnson, partner and COO at Origin, says that
as a start-up, his firm couldn't ignore the economic
argument for outsourcing. "We have a clean slate,
so we can build our ideal model; we don't have legacy
systems to worry about," he says, adding that Origin
intends to restrict head count in the middle and back
office.
"Our preference was to take the outsourcing route,
but before we did that we compared costs between outsourcing
solutions and insourcing, and it was pretty clear that
the economic arguments for outsourcing are quite compelling,"
says Johnson.
Paul Holmes, head of investment administration at Origin,
expects to be up and running with HSBC this month. Given
that the firm has no legacy systems or live clients
yet, and that both its OMS and proprietary portfolio
analysis system ThinkFolio already have interfaces with
HSBC's Icon fund accounting system, he anticipates a
smooth implementation.
"In terms of trading flows, we're looking for
that same level of automation and minimalist environment
in terms of manual intervention," Holmes says.
He further explains that Origin also plans to utilize
electronic trading platform developer Tradingscreen’s
TradeSmart
direct market access (DMA) system.
"We will be looking to have an electronic flow
of information out of ThinkFolio to TradeSmart, and
then back from TradeSmart to ThinkFolio, which will
then generate soft trade details into the Icon system,
which can then be enriched with settlement details and
static data details before those trades get sent via
Swift to either HSBC or other third-party custodians
that we might use," Holmes explains.
The ability for buy-side clients to select components
of HSBC's fund administration service was designed in
order to appeal to a range of diverse clients, according
to Richard Hale, head of European sales at the bank's
institutional fund services division.
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