Case Study

Meeting the Unique Needs of Asset Allocators

As a consulting firm with deep expertise in operating model design, Olmstead was engaged by an OCIO firm (Outsourced Chief Investment Officer) to assess their fragmented operating model which supported their investment teams via manual and offline processes. We were tasked to produce a strategy toward outsourcing their middle office and investor services functions, and produce strategic recommendations around their in-house systems. As an OCIO, this firm is primarily an asset allocator, managing fund-of-fund portfolios in both discretionary and advisory capacities, so there were unique needs and challenges:

  • Hundreds of clients with a spectrum of service models
  • Onerous end-to-end investment lifecycles for tens of thousands of positions in alternatives
  • Cash and trades managed manually across dozens of custodians
  • Broad range in availability of period-end statements, both in timing and general access
  • A need for fund look-through, to the vast numbers of underlying investments to execute compliance, ESG management, and exposure reporting

A thorough discovery period was required to understand the firm’s current state. Olmstead validated the firm’s hypothesis that outsourcing to a service provider would enable them to realize the following goals for their operations teams, portfolio managers, and clients: 

Shield with a tick inside

Establish authoritative source of intra-month holdings and valuations

Computer with a tick

Increase turnaround of valuations by up to 15 days

Enhance front office support with exception-based oversight

Gears with arrows around them

Eliminate 75-80% of manual processes

A clipboard with a gear and lines

Improve infrastructure and capacity to manage anticipated growth

Primary Goals of Project

    • Design a vision for a strategic operating model that enables focus on core business, positioning the firm for scaling their client base
    • Evaluate opportunities for outsourcing Middle Office, including transaction management of both marketable and non-marketable assets, cash processing inclusive of wires across numerous third-party custodians, and IBOR reporting
    • Enable look-through capabilities to expose their investments’ underlying securities on the IBOR, to enhance analytics and better inform trading decisions
    • Support ongoing business growth and product expansion to new investment types and new structured product offerings without adding headcount
    • Reduce reporting errors and mitigate the need for redundant manual reconciliations of reports
    • Eliminate manual tasks across the investment lifecycle, including subscription documentation, wire settlements, valuations, and reporting
    • Enhance the proprietary OMS to introduce upstream controls to reduce trading errors and integrate data flows with the selected provider 

Olmstead conducted the assessment of the current state, and led the search for a middle and back office service provider. Due diligence was conducted with prospective providers, which included a detailed RFP, capability and fit assessment, target operating model design, and a proof of concept. Executing our Olmstead due diligence methodology allowed us to deeply understand the unique needs of the client, and translate those requirements to the providers. This approach enabled the providers to present a clear view of how the client’s needs could be met, empowering our client to make a well-informed selection.


Olmstead’s Key Activities

  • Conducted a series of workshops with Operations and Investment Teams to capture current state, requirements, and metrics
  • Conducted workshops with Technology Team to capture existing technical infrastructure and data flows
  • Assessed gaps and pain points raised by Operations and Investment Teams
  • Produced tactical and strategic recommendations to optimize the current environment, reduce risk, build necessary scale, and align to the client’s strategy for growth
  • Provided recommendations for outsourcing and led outsourcing due diligence and provider assessments
  • Assessed the OMS and provided strategic recommendations
  • Facilitated sessions with the client’s executive team to evaluate options and drive consensus
  • Developed detailed roadmap and implementation plans


The client selected a service provider who could perform their middle office functions leveraging a scalable operating model and advanced technology, enabling the client to transform their operations area into an agile, oversight-based team. Tactical improvements were implemented at the client’s shop while they prepared for conversion, to immediately mitigate risk areas. Strategic development to the OMS continued to be made, with an enhanced focus on data quality controls, reducing trading errors.