‘HUB’ approach to buy-side middle and back office unites rivals

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Emmanuel Roman CEO of PIMCO.

A new technology-led company, HUB, is being formed to build a cloud-based operating platform aimed at transforming asset managers’ operations technology.

The firm is being created by several erstwhile rivals including PIMCO and Man Group – who both invest money for institutional clients; IHS Markit and State Street – each of whom provides order management systems (OMSs) to asset managers; and Microsoft and McKinsey.

The company selected Microsoft as its technology platform provider to empower HUB to develop its asset management operating platform on Microsoft Azure cloud.

Emmanuel Roman CEO of PIMCO, said, “Through this partnership, HUB will combine modern technology and infrastructure to streamline our middle and back office functions and feed data to every part of our business including distribution and analytics. This technology platform forms a core component of our broader strategy which combines technology with portfolio management and client service excellence to provide investors with investment solutions.”

HUB’s greenfield platform will be built by asset managers to try and transform the industry’s operating model by providing solutions designed to be flexible and modular across middle and back office functions, while reducing cost and mitigating risks. The platform could help to assist the move towards a digital operating model enabling asset managers to deliver solutions to their clients both now and in the future.

Luke Ellis, CEO of Man Group.

Luke Ellis, CEO of Man Group, added, “Man Group has invested heavily in developing our own proprietary technology infrastructure for many years now. Collaborating on this initiative with such great partners has allowed us to leverage our expertise with a view to helping transform the asset management industry’s operational architecture, which ultimately allows for better servicing of clients’ needs.”

HUB will take a ‘data-first approach’ intended to break down silos and friction between systems and data. This greenfield solution will use cloud-based data technology and security to transform middle and back office operating processes, reducing costs associated with supporting numerous legacy systems and improving efficiencies by connecting to third parties.

Lance Uggla, Chairman and CEO of IHS Markit.

Lance Uggla, Chairman and CEO of IHS Markit commented, “HUB represents a fantastic opportunity for the asset management industry to reimagine its operating model. With a greenfield approach to developing the platform, HUB will address many of the operational challenges facing asset managers today. We are excited to be part of this transformative joint venture that brings together the insights of our partners with IHS Markit’s commitment to enabling the success of the industry.”

Ron O’Hanley, Chairman and CEO of State Street.

Ron O’Hanley, Chairman and CEO of State Street said “HUB promises to bring innovative solutions to important investment industry challenges. State Street is excited to partner with PIMCO, Man Group, IHS Markit, Microsoft and McKinsey and we are committed to supporting HUB with our Alpha and custody platforms.”

Financial terms were not disclosed.

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