In recent years, the investment management industry and fund managers have experienced increasing pressure based on fee compression, competitiveness, limited intermediary access, new fees for data, technology, and services, and newly implemented complex regulations requiring a new data and reporting infrastructure. Additionally, the past year has brought other challenges to the industry in response to these pressures. As a result, many fund administrators reduced costs by regularly cutting staff, outsourcing jobs offshore, and eliminating programs for customers.

Unlike many administrators, Ultimus is an independent firm solely concentrated on the fund administration business, thereby strengthening its resilience to industry pressures, “Our company is focused on fund administration, providing high quality service, forward looking technology solutions and helping our clients be successful, ” says Gary Tenkman, CEO of Ultimus Fund Solutions responsible for providing strategic leadership to the company. “We have demonstrated consistency throughout the years by providing high quality services and an unwavering dedication to our clients and their shareholders.” 

Established nearly 40 years ago, Ultimus provides a broad array of tech-enabled services to registered and unregistered pooled investment services. Ultimus is currently a leading independent provider of full-service fund administration, accounting, and investor servicing solutions to the registered funds, private funds, and public plans. Over the years, the firm has supported innovative investment products with unique strategies that span from traditional portfolios to highly complex alternatives such as real estate and private equity.  

With the COVID pandemic at the forefront in 2020, the industry was forced into a remote working environment which impacted the security of its operating environments. To its benefit, Ultimus had a successful technology strategy underway and the capabilities already in place to quickly transition to a remote working environment. In addition, Ultimus already had an outstanding reputation for compliant and secure business practices. “Our strong, proven controls coupled with industry-leading technology provides a highly stable and secure operating environment for our clients’ funds,” says Tenkman. “Ultimus’ processes, procedures and operating environment have continued to adapt during this challenging time as opposed to large scale changes to meet the increasing regulatory pressures, COVID market volatility, and the global work from home environment. As a result, while the rest of the industry was working to get up and running in accordance with extreme volatility along with high volumes and work from home orders, Ultimus was already working to provide to a higher-level of servicing to our clients and continuing to reduce the cost-of-ownership for their funds.” 

Technology Strategy and Advancements

As the financial services industry becomes more competitive and pressure continues to mount from a pricing and regulatory perspective, investment managers need to align their business with strategic partners committed to positioning their business for success. With barriers to entry at an all-time high in the mutual fund industry, it has become increasingly difficult to start new funds and launch additional products, even for a tenured fund manager. Recognizing this trend, Ultimus works diligently with fund sponsors and investment managers to help them navigate in today’s increasingly sophisticated and dynamic investment landscape through a consultative approach, investments in technology and hiring experienced professionals. 

To be recognized as the financial services industry’s premier service and solutions provider and provide value to investment manager clients, Ultimus designed and implemented its proprietary uSUITE® systems, allowing it to quickly and appropriately adapt to the market and fintech advances within the investment management industry.  

uSUITE is the result of Ultimus’ long-term commitment to investing in technology and client service. Its underlying applications feature built-in robotic processing software, machine-learning algorithms, and various application programming interfaces (APIs). By incorporating a data and technology strategy, the various uSUITE applications, which were developed and implemented over the past few years, have helped streamline the fund accounting and investor services workflow. It has further transformed large areas of fund accounting operations into exception-based processing.  

uSUITE uses Robotic Process Automation (RPA) to streamline massive amounts of back-end data processing, eliminating the need for manual intervention. As a result, Ultimus team members have additional time to interact with clients and understand their specific fund nuances and conditions, to drive productivity, quality, timeliness, and client satisfaction. 

“During the past few years, Ultimus built and implemented a number of uSUITE applications with the meticulous collaboration of our compliance, operational, and development teams,” adds Tenkman. “As anticipated, today, we see the uSUITE tools pay-off as market pressures, including fees, changing regulatory obligations, and technology bear down both Ultimus and our clients.”


An Exceptional Solution

As a service provider committed to a long-term leadership position in the industry, Ultimus has allocated significant resources to building a technology strategy that exceeds its competitors. “Our core accounting and recordkeeping platforms are consistently lauded as the leading solution in their categories,” explains Tenkman. “Additionally, we have collaborated with our operational leaders to develop an unparalleled set of proprietary applications that leverage APIs between our core platforms, enabling a seamless and automated workflow.” These innovative applications, referred to as uSUITE, allow professionals to focus on exception-based processing and provide value-added client service. Leading the industry, they afforded the following capabilities that most mainframe transfer agent systems and fund accounting systems cannot support.

* Real-time processing - most transfer agent systems run batch processing, which locks down systems for hours and can only be completed when all funds are prepared and run. Real-rime posting activity can be run at various intervals as needed to streamline processing without restriction to a single nightly cycle, as most batch systems are.

* Exception-based processing - the firm’s fund accounting teams are utilized to manage exceptions from its straight-through process, allowing them to spend their valuable time and insight with clients.

* Open-Architecture systems - allows for easier, faster, concurrent, and lower-cost system enhancements. This is critical for connecting with clients who are adapting to modern fintech and advisory products. With open APIs and an appetite to help clients achieve more, the company is never restricted by this open architecture systems.

* Flexibility/Configuration – the firm’s systems are considerably customizable to each client, allowing for unique user types, varying schedules, and a variety of fee types and calculation methods. The modular rules-based system is designed to support many different product offerings in a single system, including mutual funds, hedge funds, 529 college savings plans, money market funds, offshore funds, and protected principal funds.

* Onshore Support - all systems are hosted onshore, and all services are delivered in the United States.

* Intuitive Design - the device responsive shareholder portal is customized to fund and shareholder preferences. Shareholder-centric, the system reflects a single registration-based account number and consolidated investor views.

* Data validation and risk mitigation - broad systematic controls provided within the DNA of the firm’s systems prevent issues and deliver warnings at the point of entry.  

Client Onboarding Strategy

Ultimus’ project management model is highly flexible and adaptable to meet each situation’s complexities and all parties involved business requirements. “Our new client onboarding projects are led by dedicated managers with deep experience and are responsible for understanding the project and business needs. In addition, we identify key stakeholders within the client’s firm and at external entities,” says Tenkman. Critical to onboarding success is establishing key milestones, industry relationships, and a comprehensive governance structure. In 2020 alone, Ultimus converted 10 new clients from other service providers which is a testament to its people, processes, and technology.

Before implementing services, the Ultimus team works closely with client management and all relevant external parties to design a plan for success. “We begin the operational consultation process by using meetings and request lists to refine our understanding of how funds are currently being serviced today or how clients anticipate the implementation of services from our firm,” explains Tenkman. “We draw on our significant experience and will recommend industry best practices, partner connections and provide a consultative distribution analysis to propose an effective approach.”

Working directly with the clients, the firm conducts a series of operational team orientation sessions, otherwise referred to as “Day-In-The-Life” conversations. “These conversations allow our new client to meet and become familiar with Ultimus operational teams, key team members, functions and to better understand routine touchpoints between the client and various Ultimus teams and critical industry contacts,” says Tenkman. “During these sessions, we often identify areas of improvement, best practices, and efficiencies. Ultimus takes great pride in our analytical, consultative, and tech-enabled approach to these situations to improve outcomes for our clients.”

As an example, Segall Bryant & Hamill, LLC (SBH), established in 1994 and an independent investment firm that manages more than $20 billion in assets, wanted to scale its operations and maximize its cost savings across a wider asset base with a service provider that had a full technology suite, institutional quality and wide-ranging service model, and a strong client/project management approach. This project required that the Ultimus team understand the complete ecosystem of the transition. By consolidating to one provider, SBH and the SBH Funds realized operational best practices and simplified/streamlined its newly combined fund complex. This allowed SBH greater flexibility in organizational decisions across its entire back office (e.g., data warehousing, sales reporting, marketing, and branding).  

Alongside working with an institutional-grade, fullservice fund provider such as Ultimus, SBH and SBH Trust realized an overall reduction in operating expenses, including transfer agent, fund accounting, fund administration, distribution, printing, custody, and legal administration functions. SBH Trust’s board was actively involved in the entire conversion process. Therefore, having a partner with a proven track record meant that the project ran efficiently, didn’t waste senior management’s time, and was on time and within budget. Today, SBH and Ultimus continue to communicate to maintain alignment across strategic initiatives, including evaluating existing product and feature offerings and sharing knowledge of best practices and trends in distribution and marketing, evolving technologies, and the day-to-day service delivery standards.

Towards the Future

The company’s vision is to be recognized as the financial services industry’s premier service and solutions provider. As a result of the firm’s commitment, the market has been reinforcing that vision as Ultimus converted 10 new clients from other providers in 2020, the most in the industry.

Over the past three years, Ultimus has made significant capital investments to its industry leading technology and operating infrastructure and intends to build upon these recent enhancements over the next five years. This will enable Ultimus to continue to optimize internal workflows, further enable data transparency and allow for increasingly integrated and automated processes. “Our focus on delivering an outstanding client experience through continued investments in our people and both internal as well as client facing technology has brought immediate, positive impact to our business, as well as that of our clients’ business. We anticipate that our focus in these areas will continue to be very impactful in the coming years in this increasingly competitive and fee-sensitive market,” adds Tenkman.

We will also continue to capitalize and take advantage of the compression we are seeing across our competitors through the hiring of very talented, experienced professionals with deep industry expertise adding even more value for our clients,” says Tenkman.