Convergence Debuts Service To Objectively Compare Manager Complexity

Feb 14 2017 | 6:36pm ET

Fintech company Convergence has launched a new service designed to address the challenge of operational and business model transparency in the alternative asset management industry.

The new service, named Advisor Complexity Profile, provides insight into all major alternative asset classes, including hedge funds, private equity, real estate, venture capital, and structured asset funds. It incorporates around 2,000 data points on approximately 8,300 managers in more than 50 countries and assigns each of them a high, medium or low complexity profile using proprietary algorithms, the company said in a statement. Updated daily, this allows for the objective comparison of manager complexity over time using a consistent set of metrics.

Complexity is designed to meet the needs for improved transparency and analysis for all the major industry participants: investors and asset allocators, assets managers, and service providers, the statement continued. Uses include fund raising, manager research and selection, ongoing surveillance and due diligence, pricing services, assessing risk, benchmarking and sales support. 

“The digital footprint being created by thousands of asset managers continues to expand, making it harder to identify the critical data points that can provide insight into operational due diligence and risk management,” said John Phinney, chairman & co-president at Convergence. “Until now there has been no unifying product to capture, normalize and structure the kind of information that can give users an insightful and timely view into the complexity of an asset manager’s business model.”

“Complex operating models do add risk, and unnecessarily complex models can add unnecessary risk,” added George Evans, co-president, noting that the company estimates upwards of 7% of asset managers may be under major operating model stress at any given point.  

Phinney and Evans founded Convergence in 2013 following senior executive positions with Apollo Global Management and Gladstone Group, respectively. The Norwalk, CT-based company’s platform provides data, research/analytical products, and surveillance/monitoring services all aimed at increasing transparency into the infrastructure of the alternative asset management industry.  

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