Research Management Systems in 2023: Guide for Fund Managers

The investment world has changed significantly in the 20 years since the first dedicated research management systems arrived. These then state-of-the-art systems gave fund managers a digital escape door from the manual, paper-based systems of the 20^th century.

As many of these systems get consumed by strategic buyers and development of the product slows or stops, Verity is often engaged by investment teams to determine what modernization looks like.

In this article, we’ll share context and insights for investment teams that may be:

• Combining prosumer tools (Office docs, shared drives, Slack, etc.)
• Using a desktop research management system.
• Using lightweight RMS systems often built into built into external doc search portals.
• Using an in-house system.

What Is a Research Management System (RMS) in 2023?

A research management system (RMS) is a digital repository for all investment research that helps funds create, discover, share, monitor, and protect their research.

While the core function and purpose of an RMS has remained in many ways the same over the last few decades, the technology itself is being shaped by many macro trends, tech innovations, and more.

In the timeline above, you’ll notice the phases of innovation have broadly influenced how we define success in the modern RMS landscape. Funds should expect their RMS to face the reality of hybrid working, mobile device proliferation, demands for integrated idea generation, and more.

[Watch 6-Minute Demo: How Funds Accelerate Productivity With VerityRMS]

Why Funds Use Research Management Systems

In a term, operational alpha. Many asset managers turn to a research management system to help streamline idea generation and research, standardize workflows, track consumption, enhance compliance, and improve team collaboration. It brings clarity and focus.

Little Insight on Missed Opportunities

It’s easy to learn from wins and losses that entered the portfolio. What about ideas that weren’t acted upon? Many funds realize they can and should be getting as much feedback as possible, as quickly as possible, so they can make sure they are always improving. By creating a system of record, a modern RMS provides insights across the board.

Disruptive Compliance

If you’re at a growing fund, you may be juggling compliance and PM duties. An RMS can almost immediately take an immense burden off. If you have a dedicated compliance function, an RMS can give the control and access they need to build — and prove — compliance without getting in the team’s way.

Knowledge Loss & Long Onboarding Runways

When analysts go elsewhere, their knowledge, perspectives, and research history often go with it. Ramping up a new analyst can take a lot of time. With a modern RMS, new analysts can access the network of information, with context, and start contributing quickly.

Clunky Workflows

Some funds combine multiple tools for their research management, tools never built for institutional investors. Others have to hop in and out of their RMS — whether updating models or generating ideas or collaborating with colleagues. Rather than fracturing workflows, cobbling together multiple tools, investment teams use a modern RMS to bring cohesion to their fund workflows and speed to the decision-making process.

Finding the Right RMS

What system is right for you? Aside from comparing core features and making sure the team likes the overall look and feel, here are four questions to consider that speak to the tradeoffs.

How Protective of Your Process Are You?

In other words, are you happy with what you’re doing and want to retain it to the nth degree? Or are you less than satisfied and turning to an RMS to add some structure?

If you’re currently using an RMS and happy with your process, talk to providers to get a sense of what they can bring to the table, how well they can flex to suit you, and what customizations and accommodations you can expect.

If you’re looking for guidance or are coming from a mixed toolset (OneNote, shared drives, etc.), an experienced RMS provider will be able to provide recommendations and introduce universal best practices to help level up your workflows.

What Other Software Are You Using?

It has become increasingly important your new technology can speak to your existing and future technologies.

“When I talked to funds about RMS systems a decade ago, integrations rarely came up. Now it’s one of the first things we cover,“ says Luis Castellanos, Verity VP, Sales.

Tally up the software your front-office is using. What could an RMS completely replace? What would you want to keep? For technology you want to keep using, at least in the short term, make sure your RMS has all integrations you need for the individual productivity tools (OneNote, Evernote, Excel, etc.) as well as the team and fund level tools (such as Teams, Tableau, Sustainalytics).

Related: 5 Common Fallacies of a Modern RMS

Do You Want Teams to Access From Any Device, Anywhere?

Whether you want analysts to be able to share, access, and collaborate on content via their mobile devices and tablets or you want to give portfolio managers the ability to bring up their own data and research in the field, many funds are breaking down barriers with an RMS that can go anywhere.

In fact, one director of research pointed out, that mobility was one of the deciding factors for his team. “I wanted a SaaS product that the team could access from the middle of nowhere.”

In hybrid work environments, this mobile RMS functionality acts like digital glue that keeps your teams aligned and moving forward.

As it related to RMS solutions, talk to your provider about the frequency of updates to their mobile app, what feature parity looks like (does the mobile version provide everything the web app does), and what device coverage they have (iOS only or Android too?).

Does ESG Matter to You?

Funds have begun integrating their ESG idea gen and engagement tracking into their RMS. As we’ve discussed in earlier articles, the SEC is getting its hands on ESG in the near future, which will have repercussions for fund managers.

A modern RMS can deliver the ESG workflow structure that investment teams need to discover and act on ESG-related opportunities. At the same time, it can bring the transparency needed around what can be a heavily tracked topic.

“The pandemic contributed to record-breaking inflows into ESG funds. Sustainable investment inflows, however, are not a short-term coincidence. Rather, they’re part of a broad permanent trend,” says Will Keuper, Verity VP Product.

What RMS Transition Looks Like

If you’re new to the RMS scene, transition is really all about end user adoption. Historically, many research management systems have struggled here because the software didn’t match up to always heightening expectations for usability. Things that matter:

• Do analysts like the RMS interface?
• Is it in the same realm as the prosumer tools they’re familiar with?
• Is it cutting steps out of their workflow and providing more focus?

Funds migrating from another RMS typically have two concerns, says Hoony Youn, CTO at Verity.

• Can you recreate everything I’m already doing?
• How long will it take?

Whether you can recreate everything relies on the flexibility of the software and the provider’s migration experience and capabilities. For example, teams at Verity have migrated from so many providers that they’ve developed special tools and processes.

“We have dedicated data migration toolkits that we use to migrate specifically from other RMS providers,“ said Youn, who’s been leading the team dedicated to fast, accurate migrations for over a decade.

In terms of duration, that varies. How much historical data are you bringing over to your new RMS? How many customizations are you looking for? But the average at Verity is 4 to 6 weeks.

PDF: Verity’s non-disruptive migration process >>

Bottom Line

The RMS landscape has changed much — and will continue to evolve. Make sure your new system can help your team face the market without missing a step.

Thinking About Updating Your RMS? Let’s Talk

At Verity, we help teams migrate, update, and integrate with VerityRMS.

Contact us today for a demo — or to talk to our team of experts >>