European Asset Management

European Asset Management Case Study

With market data costs escalating, and no meaningful insight or transparency into data usage across the Group, the newly appointed market data manager knew action needed to be taken.

So based on her experience of the market, and with a limited number of internal staff, and acknowledging that certain market data products and services had complex terms and rate cards, she contacted Kalaxis.

The year is 2019. The asset manager is a UK tier 2 firm, with a major presence in Switzerland, with AuM of $140 billion.

The market data manager’s previous company, a tier 1 asset management group, had used Kalaxis for something similar, so she knew the quality of the consultants was outstanding, and how deep they were into the details.

The scope of what she wanted Kalaxis to analyse and report on, was the non-terminal and streaming data supplied by Bloomberg, which for them included overnight bulk files, ad hoc requests for securities and price valuations of non-exchange traded securities. Because of a range of acquisitions and mergers, there were 8 different accounts, an unusually large number for a firm of this size, plus annual spend of over $2.5m per annum.

The Kalaxis team set about their task, and within 8 weeks, reported their findings. They had identified savings of $707,000, which represented 27% annual spend.

The market data manager was delighted with the results, especially as she had had to go “out on a limb” to convince her management to approve the assignment. The savings could be realised by a combination of (I) Aligning contracts to fit more closely the business need, (II) Some minor changes in how the data was requested, and (III) Some changes in underlying business systems.

Within that total, the “low hanging fruit”, namely, non-disruptive changes, represented a huge $570,000, achievable within months.

The market data manager commented at the time: “Without Kalaxis we would never have identified that many savings that quickly and in such granular detail. The engagement paid for itself, many times over, especially as we were able to realise the immediate savings with no impact on either the business or IT.” “I wouldn’t hesitate to recommend Kalaxis to other financial institutions, that are tasked by their Board, to reduce recurring market data costs, and improve governance, control and insight into the company’s market data consumption.”

Jean-Pierre Gottdiener, Founder and CEO of Kalaxis commented: “The situation faced by this asset manager is typical of what we see in many other companies. Firms that have evolved and grown over a period of time, failing to keep adequate control and oversight on their market data usage, and before they know it, the operating costs are eating into profit margins. We were pleased with the amount of savings we identified, as the percentage was consistent with the average we have found across all our client projects.”