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Raising The Investment Reporting Game - A Conversation With Landytech

Tom Burroughes

15 October 2021

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 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.