A philanthropic foundation was experiencing reporting issues due to reliance on an outsourced investment advisor. Union Park Consulting was brought in to help.
A philanthropic foundation’s reporting was tied to several outsourced service providers.
The foundation relied on an outsourced investment advisor for private investing reporting including exposure/transparency data as well as performance metrics such as unfunded, TVPI, DPI, IRR.
In addition, the foundation relied on its administrator for performance reporting and the foundation was experiencing service level issues with its administrator related to timeliness and accuracy.
First, UPC led a discovery phase and drafted a strategic operational plan for the foundation’s investment operations which included a staffing model, technology diagram, and what should be managed internally versus outsourced.
UPC presented its findings and recommended actions to the CIO of the foundation’s investment office. In addition, UPC worked with the CIO to present the final report to the foundation’s senior leadership.
Then, UPC converted an existing portfolio management system to a shadow Investment Book of Record (IBOR). This involved reconciling 20+ years of historical accounting and performance data, managing the technology vendor on data structuring and setup, and instituting a daily process to maintain the IBOR platform.
The IBOR allowed the investment office to generate on-demand and up-to-date reporting. Since the IBOR was reconciled monthly to the administrator’s records (ABOR), the foundation could be confident in the integrity of the data.
Once the IBOR was set up, UPC worked closely with the Operations Manager to migrate private investment reporting from the outsourced investment advisor to the internal team.
Next, UPC provided temporary operational capacity by maintaining daily shadow accounting within the IBOR and working with the Operations Manager and Finance Manager monthly on the administrator’s accounting close until the foundation was able to hire an additional investment operation professional. UPC documented the processes that were established during this period in a procedure manual including new fund onboarding, daily shadow accounting and reconciliation, monthly performance reporting and vendor management.
While providing temporary operational capacity, UPC assisted the foundation’s team with the recruitment of a new Operations Manager through drafting an initial job description, conducting interviews, and drafting a case study. UPC developed and executed an onboarding program for the new hire which included onsite training.
Finally, UPC created a dashboard to track operational key performance indicators (KPIs) around investment accounting, reporting, and vendor responses. This dashboard allowed the internal operations team to measure their performance and to better guide conversations with their vendors such as the technology provider and administrator.
UPC completed the shadow IBOR implementation and generated the foundation’s first performance flash report through the newly established IBOR within 2 months after being hired.
Due to the establishment of the IBOR, UPC was able to provide the investment team with a performance report 12 days after month-end compared to the administrator who issued the final performance report 30 – 35 days post month end.
UPC finalized the migration of private investment reporting from the outsourced investment advisor in 3 months, which provided the investment office with readily accessible and highly configurable private performance metrics.
Ultimately, UPC empowered the foundation to take ownership of its investment data, which allowed the investment office to self-serve its performance reporting and analytics on a timely basis. UPC also improved the efficiency and accuracy of the monthly close process with the administrator. Once the IBOR was implemented, the foundation was able to close its accounting and performance records with the administrator within 7 business days versus previously taking 12+ days.
Finally, UPC helped investment research professionals spend more time on diligence and portfolio monitoring by migrating operational responsibilities to the operations team. This included oversight of the technology vendor and private exposure/transparency data.