• Mon. Sep 28th, 2020

Dimancherouge

Technology

PIMCO’s internal memo on new team to rival BlackRock’s Aladdin

  • PIMCO’s new global digital unit will provide clients of the $1.9 trillion asset manager with resources like research, tools, and analytics, according to an internal memo seen by Business Insider.
  • Ainslie Simmonds, a former fintech executive who has also worked for beer conglomerate Coors Molson and Campbell Soup, will lead the group. 
  • The new unit will rival BlackRock’s Aladdin, which has become a go-to resource for financial advisers and institutions thanks to its risk management tools. 
  • Visit Business Insider’s homepage for more stories.

PIMCO, the $1.9 trillion asset manager known for its fixed-income prowess, is creating a new unit focused on getting the firm’s research, tools, and analytics into the hands of its clients like pension funds and wealth managers, according to a memo distributed internally last week and reviewed by Business Insider.  

Ainslie Simmonds, the firm’s head of US digital client, will lead the new unit, called the global digital team. Simmonds is a longtime financial-technology executive who has also been a marketing executive with beer conglomerate Coors Molson and food and snack giant Campbell Soup.

Simmonds is also former fintech executive who helped build LearnVest and thinkorswim, which were sold to financial services firms Northwestern Mutual and TD Ameritrade, respectively. She has been with PIMCO since 2018.

The memo from PIMCO’s marketing chief Cathy Stahl and technology chief Dirk Manelski said the new team will build on the firm’s current practices of providing clients with market and investment research with analytics and tools like portfolio stress tests and risk management analysis. The impetus for the new group included global clients’ demand for high-quality digital experiences, a spokesperson said. 

“With the power of the time tested PIMCO investment intelligence at their fingertips, PIMCO’s clients can deliver the right outcomes for investors,” Stahl and Manelski wrote.

What is unsaid in the memo, but implied, is the presence of standard-bearer for this type of platform in the money-management industry: BlackRock’s Aladdin platform, which analyzes investment portfolios with a focus on risk management and is widely used by financial advisers and institutions. 

Aladdin has lofty ambitions, according to BlackRock founder and CEO Larry Fink, with the world’s biggest asset manager hoping its platform will become the “language of portfolios” by 2025. Last quarter, the New York-based asset manager brought in $278 million in technology services-related revenue, up from $237 million a year earlier, which the firm said primarily reflected higher revenue Aladdin generated. 

Read more: Larry Fink, CEO of the world’s biggest asset manager, says BlackRock’s massive Aladdin platform is really just a tech startup

There are other tech-focused risk management tools on the market. Financial advisers and other wealth managers use the software provider Riskalyze, and massive quant hedge fund Two Sigma sells its risk management program known as Venn to asset managers. State Street’s Charles River arm partnered with Axioma last year to provide the latter’s risk analytics to Charles River’s clients.

Allianz-owned PIMCO, headquartered in Newport Beach, California, is launching the group as traditional asset managers focus on boosting their technology capabilities.

Larry Fink

Larry Fink, the chief executive of BlackRock.

GettyImages 632168302


The industry has historically been slow to change, and faces an onslaught of new money-management startups and rivals in the marketplace. 

A survey of senior asset management executives published last week showed most believed technology will play a critical role in shaping the industry’s future, but a sliver of those respondents said they felt satisfied with their firms’ approaches to updating and incorporating new technologies. 

Two-thirds of the 201 executives polled said they believed more resources should be allocated toward technology, according to the report published by the financial data and software company FactSet.

Read more: Top asset-management execs are gearing up for big tech revamps. Here’s how they’re thinking about budgets, hiring, and high-priority projects.

A spokesperson said PIMCO’s new team, which is live, is not charging for the products it will offer clients, like investment analysis tools to review entire portfolios. BlackRock, meanwhile, charges firms for its Aladdin services.

The firm expects the team to grow to between 25 and 30 people by year-end, and “will grow as it continues to develop new applications.” The spokesperson declined to specify the group’s current size but added the firm will seek out talent from the financial-technology space.

“The firm is interested in finding talented and experienced professionals in digital product management and UX design, especially from the fintech sector,” she said.

When asked about parallels to Aladdin, the spokesperson said: “Our clients highly value our analytics and wanted to have access to our platform given our expertise in fixed income.”

The team will report to the marketing and technology divisions. The firm is also creating an advisory group focused on client-facing digital strategy filled with senior PIMCO executives around the world, including Stahl, Manelski, and Greg Hall, the head of US global wealth management and private strategies, according to the memo.

“These measures reflect both the strategic commitment that PIMCO is making to this important area and a recognition of the unique talent, resources, and deep global capabilities across multiple functions — technology, marketing, analytics, and gold-standard client service — that PIMCO can offer clients,” Stahl and Manelski wrote. 

Read the full memo below.

Colleagues,

We want to update you on an exciting and innovative change we are making to enhance our digital capabilities. We are creating a new Global Digital team dedicated to growing and evolving digital experiences across the firm.  The new team will tap PIMCO’s proprietary analytics to build best-in-class digital tools that provide account managers and our clients with world-class resources to help them optimize their investments.

Clients are becoming increasingly sophisticated and rigorous in their consumption and analysis of investment strategies and their expectations of digital experiences with investment manager partners. PIMCO has a proud legacy of providing clients with smart, insightful, and outcome-oriented investment and market commentary, and we are now looking to further enhance this expertise with tools and analytics investors need to make key decisions and allocations. With the power of the time tested PIMCO investment intelligence at their fingertips, PIMCO’s clients can deliver the right outcomes for investors.

Our Global Digital team will be led by Ainslie Simmonds, Executive Vice President and currently Head of U.S. Digital Client. Ainslie and team will expand their remit to now support our global businesses with the guiding principle of working collaboratively across the firm to bring innovative digital products to a broader range of PIMCO’s functions and our clients, and always grounded in our “clients-first” mantra.

Global Digital will operate as a standalone business function reporting jointly to both of us, given that the provision of real-time tools and analytics sits at the nexus of Marketing and Technology. In addition, we have created a global advisory group that will outline a shared client-facing digital strategy. The Managing Directors who are members of this group are Craig Dawson, Head of EMEA, Kim Stafford, Head of APAC, Greg Hall, Head of U.S. GWM and Private Strategies, Candice Stack, Head of Client Management, Americas, Cathy Stahl, Global Head of Marketing and Dirk Manelski, Chief Technology Officer. These measures reflect both the strategic commitment that PIMCO is making to this important area and a recognition of the unique talent, resources and deep global capabilities across multiple functions – technology, marketing, analytics and gold-standard client service – that PIMCO can offer clients.

Ainslie brings deep experience to this role. In only two years since joining PIMCO, Ainslie has been instrumental in creating a significantly enhanced digital experience for our U.S. account managers and clients. She has worked collaboratively across the firm, including with our deep digital talent pool in Marketing and Technology, and our analytics talent in the Client Solutions and Analytics team to build and launch award-winning digital enhancements like PIMCO Pro – our portfolio analysis and stress testing tool, and our soon to be released PIMCO Retirement, which is an innovative planning to tool to optimize decumulation strategies using the firm’s unique expertise in the areas of pensions and defined contribution.

Prior to joining PIMCO, Ainslie helped build two fintech startups – thinkorswim, a high-frequency options trading brokerage that was sold to TD Ameritrade, and LearnVest, a digital financial advice platform that was sold to Northwestern Mutual. She also held prior roles in consumer products companies Coors/Molson and Campbell Soup Company. Ainslie holds an MBA from Harvard University and an undergraduate degree from the University of Western Ontario, Canada.

Please join us in congratulating Ainslie on this incredibly important new role and wishing her and the team best of luck with their expanded digital mission.

Cathy and Dirk

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