INVESTOR VIEWS Series features: Ryan Kalish, Founder & CEO,

(Click image to play) In this episode of the Investor Views series, Ryan Kalish and I discuss how institutional investors are becoming more data-driven, how Allocator’s product developments are a direct result of client requests for data technology solutions and Allocator’s new alliance with Morningstar. We also talked about the importance of communication and how fund managers can benefit from providing more information to investors.

Show Highlights

In this episode, Ryan and I talked about:

  • How his role performing due diligence and manager analysis at Stenham Advisors, a $4B fund of hedge funds, lent to the formation of

  • The fund data management solutions provides for institutional investors and advances to the platform since 2013.

  • How ‘standardizes’ data sets without forcing managers into ‘templates.’

  • Allocator’s expansion into tracking more private equity, private debt and venture capital, based on the investment interests of their institutional investor clients.

  • Morningstar’s acquisition of a non-controlling stake of in May of 2020 and Allocator’s ‘alignment of values’ with Morningstar.

  • The types of institutional investors that use Allocator’s data tools.

  • Allocator’s approach to collecting data and providing fund data solutions to investors.

  • Types of funds for which provides data.

  • Why fund managers should provide as much information as possible to investors.

  • The key to establishing trust and forming relationships with institutional investors.

  • How differs form other fund data platforms and how they strive to be the technology ‘innovation partner of choice’ for investors.

  • Which types of funds have out performed in 2020 and a primary reason others may have under performed.

  • Investors’ increased interest in healthcare-focused fund in 2020.

  • Growing investor interest in blockchain technology and cryptocurrencies, but not so much investment ‘activity’.

  • Looking forward to Allocator’s innovative new releases/developments coming in 2021.


3:38We’re helping investors manage the flow of data from all of their investments. We try to capture as much granularity around whatever managers report around their investments and then standardize that unstructured data for analysis and reporting.”

4:01 “The other side of it, which is more where we started, is more around discovery, finding new managers, screening, peer grouping and the initial frustration was more around…the managers we tended to invest in, the data on those funds was not really readily available. Those funds were happy to share their information with some investors but not the public. That was really the initial idea that got us started, but then over time we started working with a sovereign wealth fund and a family office that helped us build more of a portfolio monitoring side of what we do, which really since 2016 has been our primary focus.”

5:20 “I’d say the biggest innovation we’ve got is around the mapping and standardization of data. Being able to use data reported by managers that they report in an unstructured way without imposing templates on the funds. I think that’s a big part of what we do.”

5:40A big part of the change that’s been happening at Allocator is expanding outside of just hedge funds into other types of private funds, many private equity, but also we’ve been pushed into private debt and venture capital and different areas which is really driven by our clients, which are capital allocators, institutional investors and family offices, what they have in their portfolio and where they are tilting their portfolio towards.”

7:02Our approach is we’d like to receive as much information as possible. All information has some level of value. We then provide tools for the investor to help them map this data, so if they’re invested in 50 to 100 or 150 different funds, and all the funds are reporting in slightly different ways, we give them tools where they can look at that same data through different lenses so that they can compare funds side by side.”

8:57I’d say we are predominantly focused on the funds our clients are invested in, but we do also have tools for research. Funds are welcome to permission their data to all of our clients, so we do have a nice universe of funds that are sharing data and documents more broadly. We also partner with other databases and clients can upload their own data so that they can build that wider universe of funds for peer grouping and filtering really.”

9:44 “I’d say primarily it’s an alignment of values. Morningstar’s mission is to empower investors’ success which is very much aligned to our own values. Our clients are capital allocators investing in external managers and monitoring those investments and everything we do is aligned to help them in their work flow and to champion their pursuit of clarity, opportunity and efficiency so there’s a really good alignment there.

11:39 “It’s all investors that invest in 3rd party funds and private funds where the data is not available publicly. We have private banks, insurance companies, wealth managers, sovereign wealth, fund of funds. Those are they types of institutions. They all tend to look like ‘internal’ fund of funds and maybe they have some direct holdings as well.”

12:20Our coverage is excellent in hedge funds. I’d say that’s where we’re strongest. That’s where we started, but we’re asset class agnostic, so a client can tell us what funds they’re interested in and we’ll track the data on that list of funds. Private equity is a big focus for us right now. Private equity and venture capital.

13:20 “The biggest thing (fund managers should do) is give investors enough to understand the strategy so they can anticipate what environment might be adverse for the strategy and continue to be a partner through those tougher periods and then through the full life cycle of the investment. I think, provide as much information as possible would be our suggestion to fund managers who are considering what (data) to share.”

14:00 “On the private market side, I’d say there’s more and more interest in the underlying company data not just the fund level flows, the transactions, capital statements, etc.”

15:10 “I think we’re fortunate that we’ve had clients who have been with us quite a while. I think it’s more difficult now to build those relationships, but I think it’s just communication, trying to understand what the needs are of those investors, who their stakeholders are, what the needs of this stake holders are, what their process is, how their team is composed and just try to listen as much as possible.”

16:50 “I think the way to think about allocator is first and foremost we’ll automate data management. So a lot of the information that investors have is kindof sitting in different email inboxes, sitting with different analysts and there might be one person on the team who’s the point person that everybody asks when they want some information about a fund or portfolio or some analytics. I think that for firms that are looking to move towards being data-driven organizations we can help provide a very clean data feed that is bespoke to our client, removes manual data entry so that the investment team can focus on meeting with funds, doing due diligence, using judgement to make decisions, spending time on those value-added activities rather than manual data entry and fighting to find different spreadsheets and formulas that aren’t working. I think that data layer is most important and we can save time, improve accuracy and we can increase the scope of what a team is able to track given their resources. That’s the foundation, the data. And then we can layer on top of that analytics, reporting and insights which is much easier to do when you have a good foundation of data. And we are constantly releasing new tools and different ways of using the platform. We love to build things that our clients and prospective clients are looking for and that’s the primary input into our product development road map. So if an institutional investor is tackling a certain problem or thinking about how they can improve their processes, I would certainly welcome any conversations so we could brainstorm and think about different ways of doing things. Ultimately, we see ourselves as being the innovation partner of choice for these capital allocators and to build those relationships over time as these organizations move towards being really data-driven.”

20:09 “I think it makes sense for an independent organization to fulfill this (data collection, management) function in the industry, because rather than each investor having a function within the organization to standardize and scrape data, it makes sense for Allocator to receive all of the data directly from fund managers and for it then to be permissioned out to different investors with different levels of access so that the data is cleaned and checked once. And the managers are involved in that process. The managers can see what we’re doing all along the way and we’re very transparent and that relationship with the manager is a big part of the value add.”

21:30 “It’s a difficult environment when a just few stocks are doing so well and pushing up the market, so I think it’s all relative to that. Funds that have had exposure to some of those stocks have done really well. It’s been a very good year broadly for a lot of funds that report to us. We’ve seen funds on the macro side doing well, we’ve seen funds with embedded volatility exposure doing well. We’ve seen a lot of interest in healthcare, healthcare focused funds.” We’re actually doing a webinar series focused on investments in healthcare, which has been very well-received. And also just private markets in general.”

22:40 “I think (fund underperformance this year) has been around timing. I think the funds that just got their net exposure wrong, maybe cut their exposure too late and then didn’t wrap it up early enough in the last few weeks. Just trading around the markets, I think that’s been a big differentiator between funds that have done really well and funds that haven’t done so well.”

23:45I think the main challenge around COVID is communication, just not being able to meet people in person and building those trusted relationships especially at this difficult time are really important.”

24:23You know in this day and age I think a fund should be able to work remotely and from an operational perspective, I don’t think there should be any issues managing a fund in this environment. And I think there probably are opportunities if anything around COVID and BREXIT for investment returns and i think healthcare is a nice example of that.

24:56 “Driving capital towards healthcare initiatives is something that we should all be pushing for and those investors have been rewarded for that….For a long time biotech and healthcare was a area that a lot of investors didn’t feel well equip to navigate. I think more and more investors are showing interest in that space.”

25:50We’re definitely seeing interest (in blockchain technology and cryptocurrency), but I wouldn’t say activity. It comes up a lot in conversations that are very broad conversations and we’ve spoken to a handful of fund of funds that are focused on blockchain and crypto currencies. I don’t think any of our clients have meaningful exposure to cryptocurrency or cryptocurrency trading funds and I think those that do are really just in Bitcoin.”

27:25I’m just really excited about some of the innovations we’re working on and the technology we’re building that we’ll be releasing in the early part of next year.”

27:43Every now and then we have these big releases that really change the value add in a big way in different areas so those are the kinds of things I’m really excited about. And also just hopefully being able to travel more and get back on the road and meeting people. I’m hoping that at some point next year that will become more normalized.”

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