Aussie investor VFMC builds its data capabilities

Victoria Funds Management Corporation, one of Australia’s leading institutional investors, is putting in place infrastructure for data to support a drive for modernizing operations and investing capabilities.

Sally Collins, chief operating officer at the A$65 billion (US$45 billion) VFMC, said, “We want a technology platform for the entire value chain of data: to ingest it, store it, analyze and visualize it.”

Beyond that, the organization needs a centralized, accessible framework for its data in order to add analytics and unstructured data. This is to both streamline existing work among the investment teams and to eventually add analytics to a broader range of asset classes, notably in private markets.

To get there, VFMC is integrating an enterprise data management service from a unit of BNY Mellon now called BNY Mellon Data and Analytics Solutions, but was until recently known as Eagle Investment Systems.

“A lot of institutions have disparate systems and vendors, often by asset class,” said Singapore-based David Ingleson, head of Asia-Pacific at BNY Mellon Data and Analytics Solution. Such organizations need a central warehouse that incorporates data feeds from many sources, including public and private market data. “This gives them a firmwide investment view of their exposures,” which in turn provides the basis for scaling their activities.

Asset owner fintech

VFMC is a sovereign wealth fund. It manages assets on behalf of entities serving the state of Victoria, including insurance companies, government agencies, and superannuation funds. Its clients are these other institutions and investment trusts.

Its digital transformation began four years ago when Lisa Gray joined the Melbourne-based organization as CEO. For Collins and the operations team, the first years were focused on basics: workplace technology, cloud and networking infrastructure, and cybersecurity.

Cloud played a role in VFMC’s selection of Eagle; it is required by Australian law to become capable of computing and storing data virtually. Today Eagle uses its own cloud network of servers but is migrating to public vendors – a capability that VFMC wanted for itself.

VFMC’s data privacy issues are less complicated than other financial institutions. It does not possess individual investor details or other sensitive information. It has corporate (internal) data, and it has aggregate data from among its clients. Security is of course a concern, but VFMC is in a position to do more on public cloud.

VFMC also selected BNY Mellon because it wanted a vendor with the resources to invest in security and upgrades, and that could provide a managed service to not just store client data but keep it updated (cleaned) and make it easy for VFMC teams to access it upon demand.

Analytics value-add

This allows Collins’s attention to now move to analytics. Before, each team had its own data, and getting it was a manual process. Collins says investment teams spent up to 15% of their time scrubbing data.

Ingleson said, “This is more than an operational warehouse. We take in all kinds of data fees and validate that data, to ensure its quality when it moves into downstream [client] systems.”

By outsourcing this work to Eagle, VFMC’s investment professionals can focus on more valuable work, such as using data to construct portfolios and analyze risks, Collins says.

We want to use these tools to derive insights faster

Sally Collins, VFMC

In future, the fund will be able to add unstructured data and new analytic tools to the mix. For example, the Eagle platform could be applied to private assets, which make up 30% to 40% of VFMC’s portfolio but today involves the manual collection of data. 

For the BNY Mellon project as a whole, Collins defines success as the extent to which investment teams use these new capabilities. “We want to stop having a siloed view and use these tools to derive insights faster,” she said.

For BNY Mellon’s data and analytics business, the deal is a feather in its cap. Most of its sales are to existing clients of BNY Mellon the custody bank. In the case of VFMC, there wasn’t such a relationship, so this was purely an Eagle (data and analytics) sale. “We were up against eight competitors for this deal, including custodians, fintechs and tech vendors,” Ingleson said.