Technology
Raising The Investment Reporting Game - A Conversation With Landytech
Landytech, a London-based firm, has among its offerings a solution called Sesame©, which is described as a "managed solution designed to automate investment reporting and non-core activities so that clients can focus on what they do best."
It is often difficult for wealth managers of all shapes and colours to communicate investment and financial information to clients quickly, efficiently and comprehensively. In an age when more money is flowing into private market investments and illiquid asset classes, the task is becoming harder. We know that businesses such as Private Client Resources, Canoe and FundCount, among others, are busy in this area. We talk to Landytech, a UK-based firm that developed the Sesame© application. Sesame is web-based, delivering an interactive investment reporting solution. Landytech boasts an impressive board leadership, starting with Schroders chairman and (and its formerCEO) and Michael Dobson (chairman). Other senior figures include Jean-Manuel Costa (director) and Benjamin Moute (CEO).
1. What sort of firm is Sesame – where is it based,
when was it founded, etc?
Landytech is a fintech startup that has developed the Sesame
platform. The company was formed in 2018 and is based in London.
2. Who are the main people involved in the business
and what do they do?
The board is chaired by Michael Dobson (Schroders chairman). The
Management team is led by CEO Benjamin Moute along with COO
Gregory Chouette and CTO Thomas Carsuzan.
As CEO, Benjamin oversees all activities and strategy of the firm. He was previously head of investment at Schroders NFC, a multi-billion alternative asset manager. Before that, Benjamin was a partner at NewFinance Capital, a boutique alternative asset manager which he helped to build and sell to Schroders.
3. What “problem,” so to speak, does this business
aim to solve and why?
Our focus is to empower asset owners, to help them navigate
investment complexities and make informed investment decisions
via a modern experience.
Investors are faced with making timely investment decisions on a growing amount of complex data but they do not have the right tools.
Some of the problems and challenges wealth owners face are for example error-prone manual processes and the one-size-fits-all static reports, with analytics tools that do not cater for the needs of today’s sophisticated portfolios. Another challenge is being able to source all investment data in a timely fashion; this makes consolidation difficult and, with this backdrop, delivering accurate and meaningful analytics becomes very complicated.
With all these challenges, wealth owners cannot make well informed decisions about their investments which creates unnecessary risk to their wealth.
4. How big an issue is being able to map a client’s
assets, both in liquid and illiquid forms, into a single place?
It’s a big issue.
Sourcing custodial data from many banks is a massive challenge for those managing investment portfolios. The Open Banking solutions cannot deal with investment data but also private banks or custodians do not provide API access. This is why Landytech is building a global network of data pipelines with those counterparties, typically in the form of SSH File Transfer Protocols, which are encrypted protocols. For private assets, the challenges are even more complex and require other smart protocols. Landytech is providing a unique solution to meet those massive challenges.
5. What’s different in this offering from what might
also be out there?
Well, first there isn’t much “out there.” Most people still rely
on Excel and manual work to “get by.”
a. The system is designed to empower asset
stakeholders. We want to transform end-user access to their
investment information. Most solutions today service
intermediaries with limited and outdated technology;
b. We cover all asset classes. Private assets
often represent a majority of global portfolios and are generally
not covered by existing systems or very poorly if they
are;
c. The ability to consolidate client data
across different managers and portfolios. This is ultimately what
clients want. They have many accounts, portfolios, trusts,
managers. They often get decent reports from quite a few but they
cannot see an aggregated picture. When it comes to consolidating
allocations, performance, risks, and compliance they are
blind;
d. Our reporting capabilities give our clients
on-demand access to templated or fully-customised reports at the
click of a button. And that is typically on a T+1 basis. It is a
game changer compared with accounting type data generated
quarterly 45 days after period end and quite often enigmatic and
error prone;
e. Finally, I would like to mention our “limit
engine.” We built a very powerful tool that generates alerts on
any type of custom specified limits. Compliance, performance,
risk, regulatory, it’s very broad. So, you can be alerted if a
trust is distributing more than its IPS allows, for example; if
you have excessive concentration in a specific region, if a cash
balance or transaction exceeds your chosen thresholds; and
f. We have many more features that improve the day-to-day productivity and access of our clients. And many more to come.
6. Aren’t there lots of similar offerings from
private banks, etc?
No. Whilst some banks offer their global custody arrangements,
clients typically don’t want a bank that provides wealth
management capabilities for certain sleeves of their portfolios
to also cover all the other mandates. The conflicts are just too
problematic! Anyway, their solutions are expensive, limited and
clunky.
7. We talked a lot about family offices – what specific needs do they have that this offering is designed to meet? Have you come up against “horror stories” of poor reporting and lack of information? The industry keeps banging on about the need for good reporting, etc, so why hasn’t the situation improved faster?
The challenges are massive and the requirements to build a
solution are overwhelming:
-- Technology challenges include creating a global network
of pipelines to source fragmented and non-standardised
datasets;
-- Data challenges include the complex need to clean,
normalise and enrich this massive amount of data;
-- Analytical processes are then required to make complex
calculations at scale while accounting for cash flows (movement,
transactions, income, costs) in an accurate manner; and
-- Finally, you need application layers with modern and
user-friendly UI (User Interfaces) with complexities at par with
high-end CRMs or ERPs.
Engineering, financial expertise, financial statistics, design
requirements add to a massive need for capital, expertise in
different fields and lots of experience. This is not your
“everyday SaaS company” and the very few who have tried to tackle
the challenges are large corporations, who spend a fortune, and
then charge insane amounts to their customers.
Horror stories including costly “one-off” exercises where an
investment firm enters client data on a single date across all
portfolios/assets to get a “snapshot” of their overall value. One
global family paid $700,000 for this exercise to be carried out.
It took five months and was out of date before the report was
completed. The report did not include any risk evaluation.
8. On the call Gregory said there has been a seed
financing round. How much was raised?
We raised seed financing when we started in 2019 and just
completed a Series A in March raising $6 million (£4.3 million).
We have a great group of shareholders including family offices,
hedge fund managers, venture capital, and influential leaders in
the financial services industry. Some are clients. Our network is
becoming very significant with viral effect. That explains how we
have grown so far without sales and marketing teams. Our clients
are very happy and new clients have all come through client and
network referrals.
9. I understand you have 30 clients. Any that can be
named, or referred to
anonymously?
Yes, we have references which we have permission to share. Our
clients are very happy with our services, a number have written
impressive testimonials and we will be publishing them soon. We
have not lost a single client. I think that is our best
advertisement.
10. How many people work at
Landytech?
Forty nine but we have 18 open positions which we are hoping
to fill as soon as possible. The company is growing by 100 per
cent per annum.
11. We briefly discussed how this business might
dis-intermediate parts of the wealth value chain as far as family
offices and others are concerned. Can you elaborate on
this?
This is important, this is our philosophy. This is what the
digital revolution has brought to many industries. Yet, that has
not happened to the private wealth world.
Why is it that in 2021, ultra-high net worth individuals and groups with phenomenal wealth still have to struggle with Excel, go to each bank portal to get a glimpse at what they own? Technology has not penetrated this industry and we intend to change that.
There are big barriers to entry, from big banks blocking access, to financial data providers refusing an open-source approach to financial data.
The complexities of technology also mean that you need to deliver
a plug-and-play solution to end users. We have designed a
solution that leverages our amazing software platform and adds a
layer of professional services. Our fully-managed service
offering means that our clients have nothing to do and within a
couple of clicks can access the information that matters to them.
The whole process of information gathering, analysis and
reporting is a much smoother experience for our clients today
than their legacy processes and workflows.
12. In tracking the progress of this firm, what does
“success” look like?
Success means revolutionising our industry and realising our
vision. We are building a global company with very ambitious
goals. We are not trying to optimize on short-terms gains. That
is why we have focused on our solution rather than selling or
marketing. We are doubling every year and we can continue for the
next 10 years.
13. What sort of metrics and targets are you setting
for yourselves on this? Are there any businesses out there that
you model yourselves on and regard as an
inspiration?
There is no one doing what we do. We need to invent a new
solution and constantly innovate. The biggest inspiration
probably comes from technology companies such as Salesforce or
Hubspot in the CRM world. That is very much what we want to
become for our clients, their central solution for their
day-to-day activities. Third-party integrations and marketplace
is clearly the significant way forward to achieve this.
14. What have been the biggest challenges in
creating this business?
They are so many… and yet we feel lucky to be in a less
competitive area. Our business is global, so we need and aim to
be orders of magnitude better than the next thing. Today our
biggest challenge is to find great staff who will build
tomorrow’s success.