Mark Veevers and Andrew Stevens discuss how MAIA became a pioneer in multi-asset technology, the subsequent company formation and its evolution into a leading, next-generation investment platform.
Why did Fulcrum build their own technology and eventually spin it out?
Andrew Stevens: Fulcrum Asset Management was founded in 2004, and we’ve grown into a firm of more than 80 people with assets of around $6.5bn. We manage four broad investment strategies – multi-asset absolute return (“macro”), equity strategies (such as thematic equity market neutral and equity volatility dispersion), alternatives (including property and infrastructure), and risk premia (such as trend following, carry, value, and volatility).
Our strategies are highly sophisticated. We invest in everything from traditional asset classes such as equities, bonds, currencies and commodities to alternatives, such as real estate and derivatives.
Ten years ago, we found that the commercially available software could often either just support a single asset class or did not satisfy the requirements of every part of our business. As a consequence, so we started thinking about the technology we needed to help us run our multi-asset strategies. We needed investment management tools, pre- and post-trade compliance, trading and execution, post trade workflows including reconciliation and counterparty exposure management. We couldn’t find anything on the market that worked as well as we would like, so we started building a team internally.
Around four years ago, we realised it would require continuous investment and resources. Fulcrum is an asset manager and not a FinTech so, we decided to separate the two businesses. The cleanest way of doing that was for MAIA to become a new company and bring in a chief executive to take it to the next level. That would enable Fulcrum to continue doing what we do best – generating strong returns for our clients.
How did the philosophy behind Fulcrum influence MAIA Technology?
Mark Veevers: Fulcrum understood its own needs and interpreted these into a technical solution that delivers value to the business. It began with a vision to create something that was multi-asset by design and able to deal with complexity. But, while having a vision is fantastic, what made that ultimately possible was the people.
Fulcrum operates efficiently because it has an effective structure. Its capabilities are driven by a strong management team and exceptional specialists. Using this approach it built a talented team of technologists to deliver MAIA. Although MAIA is now much larger, the core of that initial team is still together today, more than 10 years after the original vision was defined, and that continuity is incredibly important.
The MAIA platform was built in collaboration with market practitioners, such as portfolio managers, traders, and operations, as well as investor relations and marketing professionals. By working closely with these groups, the technology team understood their needs and used these insights to implement user-centric solutions.
As a business delivering solutions within financial markets, we understand that the technology must keep pace with changes in the market. To do this we continuously invest in our product and our team. This level of investment ensures the platform remains the fastest system on the market, able to process thousands of orders and millions of data points around the clock each day. We also continuously invest in our relationships with users, both individually and collectively. This has been Fulcrum’s approach over the years and it’s a culture that we have sought to replicate at MAIA with great success.
What does MAIA Technology’s origins as part of an asset manager mean for its clients?
Mark Veevers: It’s incredibly powerful that this functionality was built to solve real-world challenges. We delivered a creative solution for some of Fulcrum’s trading challenges early on. We provided the teams with the ability to automate processes by scripting logic into the system. It removed the dependency on the traditional software release cycle and was a great example of how we work directly with market-facing individuals.
We describe our system as designed by investment professionals and implemented by software engineers. That’s an important distinction. It didn’t start life as an Excel spreadsheet. Our platform was architected from day one, based on principles that have been proven over many years.
What was the industry’s reaction after MAIA was rolled out to the broader market?
Andrew Stevens: The response has been terrific. Many of the prospective clients that MAIA has been speaking to are other asset managers that are either our peers or who are managing strategies very different to Fulcrum.
MAIA is a powerful engine that Fulcrum continues to use across its business today. Typically, two-thirds of our people use it throughout the day. For our clients, it’s important they know it’s a tried-and-tested too, particularly when it comes to sharing data and information across their business.
Mark Veevers: We occasionally get asked, ‘Can Fulcrum see our positions?’. And the answer, of course, is ‘definitely not’. All our clients are completely segregated in physically separated environments. We are an independent business, so we’re not encumbered by those issues. Prospects generally see upside in the provenance of the system being built inside an asset manager.
How does MAIA Technology’s next-generation platform support the growth of both emerging and established managers?
Mark Veevers: MAIA was designed to operate in a complex institutional environment and is suitable for application to a variety of use cases. It lends itself to both quantitative and discretionary investment styles but more generally to firms that are technology-led and want to have a platform that is open, so they can integrate and interact with it.
We often talk about it being a front-to-back, end-to-end, do-everything-for-everyone system, and that appeals to emerging managers or start-up funds that want a single platform that will solve most of their problems.
But the system can also be delivered in a modular fashion to support a smaller number of requirements or workflows, such as compliance and risk, order and execution management, or post-trade workflows. And that allows us to solve lots of different problems for various firms, including some of the largest institutional asset managers in the world.