5 Common Fallacies of Investing in Modern Research Management

Investment teams that bring these fallacies up often change their minds after further evaluation. 

Luis Castellanos, VP, Sales
January 24, 2022

If you’re an asset manager at a hedge or mutual fund, it’s unlikely that you are talking to other shops about research management systems.  So, please consider this piece a little bit of information sharing.  

I’ve spoken with thousands of investors about research management over the last decade — from startup shops to global funds that even non-investors would recognize.  

Below, you’ll find five of the most common beliefs about upgrading to a modern research management system that aren’t true. Teams that bring these up often change their minds after further evaluation. 

“Migrating will be a hassle.” 

Theoretically, the idea of moving an entire team and all your firm’s research onto a new platform can feel like too much to bite off.  

If this is your main concern, you can be assured that the migration process at Verity has been designed and fine-tuned over the years to have the least impact on fund operations as possible.  

There’s very little if any lift on your team to migrate. The software itself is picked up quickly, which is something I’ll cover below.  

“I prefer to just walk down the hall and talk to the team.” 

For many, particularly those of us who have been working for a few decades, nothing replaces the face-to-face interaction. The reality is that only 1 out of 5 fund managers expects to be back in the office Monday through Friday.  

When the pandemic hit, many firms scrambled. They adapted the quickest way they could by leaning heavily on a combination of Slack, Zoom, and Microsoft Suite tools, like Teams & OneNote.  

For one firm I spoke with, this conglomeration of consumer-grade tech was actually creating issues, like:

  • Losing focus and time by switching among apps (context switching/app overload)
  • Concerns with data leakage from consumer-grade security and/or not truly owning the data.  

With Verity, they have a secure, centralized place for all their research, including mobile apps, making it ideal for the new normal. When you are in the office, you’ll spend less time catching up; you’ll be able to have a much more informed conversation.  

“We can build it ourselves.” 

You could. If you can do it well and maintain it, there can be advantages to building your own RMS. It could be designed exactly to your criteria. There won’t be another one exactly like it.  

But this is extremely hard to do well, hard to do within budget, and hard to keep updated.  

A couple things to know: 

  • Proprietary systems usually aren’t user friendly; struggle with adoption.   
  • Firms that build their own get burned when the developer leaves. 

I’ve spoken with many firms over the years who opted to build their own RMS then emailed me months later — after burning through time and money — wanting to resume our discussions.  

SaaS has become so affordable. If it doesn't make sense for our major global asset management clients to build their own RMS, does it make sense for your firm?

With a partner like Verity, teams get a lot of functionality out of the box, plus a lot of customization. Not to mention, the innovations we drive into the platform (NLP algorithms, integrations), which are tough to deliver in-house.  

“My analysts aren’t going to want to change the way they work.” 

You’re anticipating pushback. That’s common.  

I’ll just say that once analysts see the potential future state of their workflow with Verity that pushback is pushed under. Analysts tell us the note-creating experience in Verity is top notch. The search capabilities, which quickly put them in touch with the content they’re looking for (or even forgot about), help improve their institutional memory. Our customer service teams make sure adoption is successful.

Overall, Verity was put together (via integrations and automations) to make sure you don’t have to force process change on your team. We work with funds with completely different personalities and processes all over world. Our flexible approach to a shop’s culture and processes is precisely why many of them decide to work with us.  

Change can be easy — I promise.  

“Our process isn’t perfect, but it’s not broken.” 

This kind of statement speaks to an elevated tolerance for mediocrity that, to me, doesn’t align with the real-world demands in the hedge and mutual fund space.  

Let’s just say that teams that get real value out of Verity tend to believe that high-performance in the marketplace is an output of everything they do: from idea gen onward. They use the RMS platform to focus on what works. They’re able to take their best, most alpha-generating processes and double down on them. 

Is anything ever perfect? Probably not. But aiming for it is, as we know, what separates the good, from the great.  

Bottom Line 

There are some perfectly valid reasons not to upgrade your RMS. But analysts and managers who come to Verity with any of the above reactions, usually realize it’s not the case. A modern RMS like Verity can be introduced with little impact, rapid adoption, and great results.  

Could VerityRMS Bring Value to Your Fund?

Discover how you can accelerate winning investment decisions with better intelligence, a leaner workflow, and quicker confidence >> 

Authored by: Luis Castellanos

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