From Manual to Automated: Revolutionizing Portfolio Liquidity Reporting with Pigment
Case Studies
Situation
A major global alternative investment firm managing over $450 billion across 500+ portfolios faced challenges with manual and error-prone liquidity reporting processes. Their existing liquidity reports were updated only once or twice weekly using Excel, relying heavily on manual data updates from multiple sources such as Investran and Hazeltree, combined with extensive email communication and manual trackers. Portfolio managers encountered errors and delays due to issues like double counting of capital movements, impacting investor service and reporting accuracy.
Approach
Following support in an enterprise performance management (EPM) system selection, Alpha Alternatives implemented a daily liquidity model leveraging the Pigment platform. The team employed an agile methodology working with the nominated client team to build and deploy the solution on schedule. The model includes automated daily data refreshes utilising Workato from numerous systems including Investran, Hazeltree and DealCloud. End-users were trained, and internal model builders from the client were nominated to own and customise the model further. Key features included multi-currency reporting, adjustable buffer values per portfolio, automated validation to eliminate double counting, simulated transaction workflows, and bank account reconciliation. The solution also incorporated automated notifications to controllers for liquidity management tasks.
Impact
- Transition from a weekly manual reporting process to a robust, automated daily liquidity model.
- Enhanced data accuracy with automated validation preventing double counting.
- Multiple self-service reporting views enabling comprehensive liquidity and cash position analysis across portfolios.
- Cross-holding analysis with drill-down into calls and distribution effects across 500 funds.
- Improved investor reporting timeliness and decision-making.
- Streamlined workflows with automated liquidity management triggers.
Conclusion
The successful deployment of the Pigment liquidity model has significantly improved the firm’s liquidity reporting and management processes. The partnership between Alpha Alternatives and the client continues to strengthen, with ongoing discussions for expanding Pigment applications to Compliance, Equity Valuations, and Performance Fee functions. The agile project team’s collaboration and adaptability were critical to achieving these outcomes within tight deadlines.