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Building a sustainable valuation function

Large investment management firm ups its game with Portfolio Valuation Operate Services

In an industry where time is money, cost-effective valuation processes are critical to operational success. For one large investment management firm, this was clearly brought home when the company realised their highly paid portfolio managers were spending an inordinate amount of time on compliance. Driven to increase efficiencies by expanding their resource capacity, they turned to Deloitte’s Portfolio Valuation Operate Services for a solution.

In search of scale

The challenge first arose when corporate leadership decided the firm should focus more on their core business—investment management—rather than on ancillary functions, such as developing technology and tracking new government regulations to ensure compliance. Although management was committed to executing on this strategy, limited resources hampered their efforts. In essence, they hadn't got the scale needed to deliver recurring and sustainable valuation services capable of keeping pace with shifting market conditions.

Not only was the internal valuation team too small to handle the volume of work and range of investment types that crossed their desks, but they lacked the resources to establish and implement the most current valuation policies and procedures. As a result, the company was struggling to meet their basic valuation policy guidelines and often had to outsource valuations to four different providers. Beyond reducing efficiency and alignment, this raised the potential to negatively impact fund performance, heightening operational and reputational risks.

In a bid to free up the valuable time of both their portfolio managers and internal resources, the company went in search of a managed solution that could bring continuous clarity and confidence to their valuation operations. Deloitte’s Portfolio Valuation Operate services perfectly fit the bill.

Embedding continuous advantage into valuation operations

To help the firm build the scale it needed to consistently deliver accurate and independent valuation services, Deloitte began by embedding more than 20 valuation professionals into the company. Working side-by-side with the company’s internal teams, Deloitte conducted valuations, created models and simplified the information delivery process to enhance efficiencies. Leveraging their deep familiarity with local and global regulations, the Deloitte team also positioned the company to withstand increased scrutiny by working directly with auditors and regulators.

At the same time, the company knew they would need access to innovative technologies if they hoped to gain real-time competitive advantage. In response, the Portfolio Valuation Operate team incorporated Valued™ into the firm’s valuation practice. This proprietary valuation workflow tool delivers interactive functionality, data visualisation and dashboards to help businesses generate insightful valuation analyses.

In this case, Valued™ enabled the company’s portfolio managers to automate the full spectrum of their investment analyses, empowering them to run their own reports while drilling down into the underlying data sources of their valuations. In addition to streamlining the valuation process, this helped free up their managers’ time to focus more on more strategic priorities and focus on serving clients.

Strengthening the global valuations process

With access to Deloitte’s global specialists, innovative technologies and deep valuation know-how, this company was able to enhance their valuation operations across the board.

For instance, by augmenting their capabilities through collaboration with a team of seasoned valuation professionals, internal resources were freed up to focus on their core competencies. The less time investment managers had to spend on the valuation process, the more time they could spend with clients and on uncovering ways to further grow assets under management—positioning the company for top-line growth.

At the same time, the company was able to reduce costs on a global scale by adopting leading-edge technology to automate parts of the valuation process. As a result, today the company can collect and track valuations data—no matter where it resides around the world—and generate insightful reports with ease.

Just as critically, the due diligence baked into their new technologies and processes allows them to keep pace with changing regulations and valuation procedures. Beyond enabling improved governance and the adoption of more rigorous internal controls, this has positioned the company to align their valuation processes to global best practices—boosting efficiencies, enhancing confidence and laying the foundation to continue scaling sustainably.

Let’s talk Portfolio Valuation Operate Services

Are your operations driven by risk insights, innovation and continuous improvement? Discover how Deloitte’s Portfolio Valuation Operate Services and our worldwide team of industry-focused professionals can support you every step of the way—and help you to operate with confidence no matter what the future brings. Contact us to get the conversation started.