Building a best-in-class investment platform

Technology plays a transformative role in investing. In the early days, portfolio analysis involved drawing charts by hand. Today, even beginner investors have access to fast, flexible and powerful applications for making quick and informed decisions. However, for asset management firms, in which the stakes are higher and the analysis is more complex, investment technology is essential to the decision-making process. Below, we will examine what we believe to be the necessary elements of a successful portfolio management system.

Portfolio analytics 101

It is our belief that an effective platform should provide portfolio managers with two basic functions: a precise view of the portfolio, and the ability to simulate changes and view the impact of these changes. The starting point is to establish an Investment Book of Record (IBOR)—an accurate and timely record of assets—before examining it under an analytic microscope. Whether focusing on exposures, performance, risk, or attribution, each lens provides a different view and perspective through multiple layers of detail.

With almost too much information for a human to practically consume, technology can be beneficial, but only to a certain extent. As the adage goes: investing is an art and a science. Knowing what to look for is often as difficult as the analysis itself, and while technology doesn’t exactly take the form of a robot investor, at least for professionals, it provides a sharp tool with which portfolio managers can cut with precision.

What makes this process complex? Although beginner investors may dabble in popular stocks, professionals have access to far-reaching global markets, both public and private. When there are numerous building blocks to assemble, maintaining a complete picture becomes increasingly challenging. Investment entities come in different forms and sizes and will push and pull on the portfolio’s risk and return profile with various degrees of impact. In a multi-asset investing framework, failing to consider the totality of the portfolio will leave investors vulnerable to blind spots. Simply put, portfolio managers must see the entire pie, even if they only manage a slice.

Recipe for a robust investment platform

Investment platforms are built by humans, for humans. However, if humans never stay perfectly still, then systems shouldn’t either. In today’s increasingly complex investment landscape, clients and investors are savvy and require systems that move in lockstep with financial opportunities and innovations. As a result, modern investment platforms should be nimble and, much like investments, not set and forgotten.

Building a high-performance system is like building a high-performance car. It requires the right type of fuel, a reliable engine and an elegant design to complement the driver. Similarly, investment platforms rely on well-organized data, robust calculators and a fit-for-purpose design to put portfolio managers in the driver’s seat. Now, we will examine in detail each of these key ingredients, in sequential order.


Data is the fuel that powers the system and drives decisions. In fact, many organizations view data as a strategic asset that can facilitate value-creation. However, maintaining a dynamic and constantly changing asset can be challenging. The architecture for storing information, for example, has evolved from so-called data marts to data warehouses and, more recently, data lakes. As these metaphorical names reveal, data repositories are becoming larger and more unstructured.

Managing this chaos requires a data strategy, or a vision and disciplined approach to collecting, storing and distributing data. At the heart of a data strategy is governance, which is created by culture, enforced by procedures and enabled by technology. Data management is essential to the integrity of an investment platform, and without it, the system cannot function properly. Garbage in, garbage out.


The engine of the system, or analytic calculator, is the component that delivers the horsepower. Before the age of cloud computing, CD-ROMs would load an entire application on the user’s desktop. Today, the core of an investment platform is a suite of smaller calculators, each with a specific role and responsibility that can be summoned with a click of a button. The clear separation of duty leads to fewer dependencies that, as a result, can expedite the development process.

This plug-and-play feature enables organizations to build platforms using a best-of-breed approach. Engineering teams can focus on developing parts where they possess intellectual property and a distinct competitive advantage, and outsource the difficult components to domain experts. Firms may also decide to outsource trivial functions that have been commoditized in the marketplace. After all, there is no need to reinvent the wheel.


What good is power if you can’t harness it? While platforms for beginner investors showcase slick and intuitive interfaces, systems for professionals remain convoluted and clunky. With an abundance of data and analytics, portfolio managers will increasingly rely on a rich digital experience to get the most out of the system. However, a fit-for-purpose design requires striking the right balance between enforcing consistency and enabling creativity. Strong design can guide portfolio managers through a standardized investment process without necessarily inhibiting them from being curious and asking the right questions.

On the other hand, bad design can lead to poor adoption rates or analysis paralysis, through which users become overwhelmed with information and unable to take decisive steps. In short, having an archaic interface or frustrating experience can quickly undo all of the work leading up to the interaction with the system. Simply put, implementing good design is no longer an option. Rather, it is a necessity, and since users are humans, and humans are susceptible to making judgements, first impressions count.

Best practices for a robust investment platform

One of the most important components of an investment platform—and perhaps the most difficult to attain—is consensus. In large organizations, enterprise applications service investors across different regions and asset classes. This can produce a melting pot of great ideas, but also an overwhelming list of requirements. We believe that an effective investment platform implements strong governance in multiple departments, even before a single line of code is written or a single dollar is invested.

A centralized platform aims to streamline not only operational procedures, but also investment processes. A measure of success is the ability for investment professionals to establish a single point-of-view or speak the same language. This requires governance on all facets of the platform. The selection of data sources, definition of pricing methodologies and addition of new features, as well as how the website looks and feels, are examples of decision points. Without strong governance, a platform may revert to a collection of siloed applications without any synergistic benefits.

Developing an investment platform is a team sport and requires cross-functional collaboration. Problems are often ambiguous, and solutions tend to have trade-offs between time-to-market and efficacy. It is often helpful to recruit translators (i.e., those who speak the languages of design, technology and investing) to help align vision and implementation. It’s not practical, for example, to build a rocket ship when a car will suffice. Conversely, a constructed car has no value if it can’t leave the garage.

The bottom line

Technology has fundamentally transformed the ability to perform investment analysis. However, building an investment system is fraught with pitfalls and can be a challenging endeavor. We believe that a successful investment platform should include a well-established data strategy, robust calculators and a fit-for-purpose design. Human collaboration is also important for upholding platform integrity and innovation. The combination of these elements empowers portfolio managers with the necessary tools to make quick and informed investment decisions.