Excellence in growth management:

Dealis Fund Operations GmbH

Dealis Fund Operations has successfully pursued a fast-track growth strategy, driving efficiency improvements in already well-organised back-office units to achieve both cost and growth optimisation. This article explains how the German company has grown at an impressive rate to position itself as a specialised service partner, handling approximately €340 billion in assets under management on a single platform since starting operations in 2009.

by Roman G. Trageiser, Spokesman of the Board of the managing Directors, Dealis Fund Operations GmbH, Frankfurt, Germany.

When two of Germany’s largest investment management companies − Allianz Global Investors and DekaBank – agreed back in 2008 to merge their back-office operations in a new company named Dealis Fund Operations, optimising growth and achieving cost efficiencies comprised two of the main strategic considerations behind the move. By grouping together their central back-office tasks, these leading German asset managers were able to obtain significant synergies through a massive increase in processing volumes.

Starting operations in January 2009, Dealis has grown into the largest provider of fund accounting and fund administration services in Germany. Its business model today is threefold structured in addressing different target groups. In addition to being a full service provider for fund accounting and fund administration, Dealis has also evolved into being an application service provider (ASP) and serving as a software system consultant. In all three areas, Dealis benefits from the expertise of many years of both system platform operation and its continuous further development.

GROWTH IN CLIENT BASE AND VOLUME

Since its inception, Dealis has succeeded in almost doubling the number and volume of funds managed for its initial clients Allianz Global Investors and Deka, as well as its latest clients cominvest and Deka International Luxemburg, all on a common system platform. A successful migration process was a cornerstone, which enabled growth right from the very creation of the joint venture company.

Starting with the administration of around €120 billion in 1,100 Allianz Global Investors funds, Dealis has grown to administer a total of approximately €340 billion in 2,500 funds. This goal was achieved by the end of 2010 and is the result of pursuing a fast-track growth strategy initiated at the beginning of 2009:

• In addition to almost 1,000 Allianz Global Investors funds already run on the common SimCorp Dimension investment management software platform at the start of the joint venture, all 260 German funds of the new client cominvest were transferred to the platform from the previous systems Xentis and Cofias (a self-developed system). Meanwhile, cominvest was merged into Allianz Global Investors.
• Successfully completing the migration of all German and Luxembourg Deka funds – originally administered on Sungard’s V3 – by the end of 2010, another 1,300 funds (thereof about 200 funds administered in Luxembourg by Dealis’s Luxembourg-based subsidiary Dealis Fund Operations S.A.) have been moved to the platform as the result of a gigantic migration project.
• Since the end of 2010, Dealis administers, in terms of asset under management, a total of 2,500 German and Luxembourg funds with a volume of approximately €340 billion for all clients on a common software system.

For both shareholder companies –
Allianz Global Investors and Deka – Dealis produced precisely the optimisation in benefits that were sought after with the joint venture: growth in terms of higher processing volumes, cost optimisation in terms of shared IT costs, as well as maximised intellectual property synergies. Reflecting this achievement, Dealis was awarded the SimCorp Strategy­Lab Growth Management Excellence Award 2011 (see accompanying box and the IUCM 2011 article).

ENABLING A FAST-PACED GROWTH STRATEGY

The task of operating system platforms in the investment management industry is becoming increasingly complex, with new challenges constantly appearing on the industry’s horizon – even more so for Dealis administrating the large number of funds it already has with a growing volume on a single platform. In close collaboration with its system provider, Dealis has ensured that the software solution can support and enable its fast-paced growth strategy.

The investment management system applied allows Dealis to make processes client-oriented and suited to specialised needs. Thus supporting future growth opportunities, the investment management solution plays an integral role in Dealis’s overall business model and strategy in addition to the perspective of efficiencies and synergies.

Measurable productivity gains and cost reductions, as well as greater flexibility and scalability in seizing business growth opportunities as they arise, comprise some of the more notable growth-related benefits achieved by Dealis’s choice of the investment management software platform.

This investment management software platform therefore has essential meaning for the type of fast-paced growth strategy Dealis wishes to pursue. That is why the company is continuously expanding its hardware and software infrastructure to meet future system requirements. With the help of annual release upgrades, patches and updates, as well as by implementing new modules and instruments, Dealis keeps the system up to date. This enables Dealis to handle far more than 1 million securities and fund trans­actions per year, while administrating more than 43,000 categories of securities with 200,000 positions.

SECURING ADVANTAGES FOR FUTURE GROWTH

In its brief history, Dealis has already achieved several competitive advantages, laying the foundations for future expansion. These include economies of scale through more cost-efficient processing of large volumes, as well as the ability to provide customised solutions for its clients’ business. This will open up paths for further customisation in the provision of client services going forward. Furthermore, broad-scale and comprehensive fund administration services can be offered.

Also guaranteeing future growth is the reliability of the company’s software provider, which ensures continued and seamless support going forward, and thus gives Dealis an extra competitive advantage.

In just a short period of time, then, Dealis has implemented a successful growth strategy, fully leveraging synergies and volumes in already efficient and smoothly running back-office units to achieve both cost optimisation and growth.

Supported by an integrated and scalable investment management system, Dealis has carved out a position as being foremost a full-service provider for fund accounting and fund administration in addition to its other evolving and expanding business activities. And with a growing number of German fund managers looking to outsource back-office activities, the situation Dealis currently finds itself in bodes well for future growth as well.

Roman G. Trageiser was appointed Spokesman of the Board of the Managing Directors of Dealis Fund Operations GmbH on 1 January 2009. Mr Trageiser is also the chairman of the administrative board of Dealis’s Luxembourg-based subsidiary Dealis Fund Operations S.A.