The Vision Behind TresVista and the Future of Knowledge Process Outsourcing
Abilash Jaikumar, Co-Founder and Managing Director of TresVista Financial Services, discusses how the vision for TresVista was born. In the Q&A, Abilash explains how the market has matured over the past twelve years and how the company has managed to continually provide innovative, client-focused service to its expanding customer base.
What was the vision behind launching TresVista Financial Services? What was the need you saw in the market?
AJ: Fifteen years ago, investment banks first started flirting with the idea of outsourcing investment banking support to India – Knowledge Process Outsourcing or “KPO.” It was an excellent idea to present investment banks with a value proposition they could not overlook. However, as with anything, there were growing pains.
The first generation of KPOs was elementary given the workforce was essentially being trained on the job. Because of this, the work requests were of a very discrete nature, and there was a low expectation of quality. For investment banking analysts, this was still better than nothing, and for the bank, the entire value proposition was cost savings. This type of outsourcing still represents over 90% of all financial services KPOs.
The vision for TresVista from the beginning was to be a second generation KPO. One where senior professionals could work directly with a team in India who would understand the objectives and deliver accurate work expediently. Ideally, TresVista would become an extension of the investment management firm’s operations.
Certainly, cost savings would remain a part of the value proposition. However, the primary value proposition is that we offer a better operating strategy from a human capital perspective. We provide our clients with experienced, flexible and reliable talent, reducing the revolving door of junior talent at our client’s firms. Best yet, we are multi-functional in that we can support our clients by providing a vast array of services that touch operations, accounting, business development and research.
Sudeep Mishra and you joined forces to launch TresVista Financial Services. How did the partnership come about?
AJ: Sudeep Mishra and I have known each other for quite a while. We were colleagues at Merrill Lynch where the idea for TresVista was born. Our professional backgrounds were very different: Sudeep was a senior manager in an Indian manufacturing business where he grew the workforce from 250 to 700 people, and I was a private equity investor. Our unique skill sets made an ideal partnership as we each brought different strengths and viewpoints to the table.
Over the past twelve years, Sudeep and I have worn and exchanged many hats, each time leveraging each other's unique skill set. Today we have a robust organization chart with a winning management team. Sudeep and I are now focused on strategic initiatives, each aimed at improving both the employees’ and clients’ experience. We are incredibly proud and humbled by what we have built.
What is your client profile and what services does the company provide?
AJ: We service clients across all asset classes, geographies and sizes. Though most of our clients are financial services firms, we work with corporations in other industries on an outsourced CFO basis. The common thread among all our clients is that they expect consistent, high-quality analysis and work.
Each client’s engagement is unique. We effectively act as an extension of each of our clients’ teams, so any assignment a smart, creative professional can do through a computer, we can do as well. The scope of our work can and does include investor relations, deal sourcing, idea generation, industry research, due diligence, financial modeling, valuation analysis and supporting portfolio companies.
Recently, we have expanded our service offering to include data science and outsourced CFO services. Our Data Science team provides our hedge fund clients with alternative data sets to be implemented into their investment strategy. Our CFO Office Support team includes compliance, fund administration and bookkeeping support. After twelve years, we have built a comprehensive and reliable service offering to meet our clients expanding outsourced servicing needs.
What have been the main catalysts for the growth and success of TresVista and how would you describe the road it took to get there?
AJ: I would say the road to get there has been slow by design. When we started TresVista in 2006, the talent we wanted to hire didn’t exist as there were no big banks in India training and turning people out into the market. We had to recruit entry-level analysts and associates, train them ourselves and grow organically. We now have a team of over 300 highly trained professionals.
Our industry is still very much in a nascent stage. Industry adoption will be the primary growth driver for our industry, regardless of other factors. Today, most finance professionals in the U.S. have some experience with outsourcing and their experience is typically someone in India with broken English who cannot get the numbers right. There will always be demand for this lower level of outsourcing. Getting clients to understand that another higher-quality model exists has been challenging. Our clients have been our best sales force, and with each new client, we get another voice validating our business model and differentiation.
Investment managers have begun to outsource more and more operational processes for various reasons. Have you seen this at TresVista? How have you been able to manage the firm's growth to meet your clients growing needs?
AJ: Asset managers today, whether private equity, hedge, real estate, credit or long-only, face more pressure than ever. From fee pressures, growing regulatory obligations to high valuations, the cost of managing an investment management firm has increased substantially. Industry developments and cost management have been the critical drivers of outsourcing across the value chain.
We have been able to manage our growth by investing heavily upfront in ERP systems, HR processes and top management. Additionally, we have created a robust training program to ensure our team can continue to provide accurate, timely and client-focused service to each of our unique clients.
What does the future hold for TresVista?
AJ: The best way to answer this question is to refer back to our mission statement.
“We strive to be close to the customer. We learn from the people we serve in order to continuously improve our quality.”
Our relationships with our customers have been the drivers of our expanded service offerings. We will continue to explore ways to be of higher value to our clients.
What do you believe are the next significant developments for the hedge fund and private equity fund industries?
AJ: Data Analytics will continue to transform both the hedge fund and private equity industries.
In the hedge fund industry, the proliferation of alternative data sets will drive costs down making them more affordable for smaller managers. Our goal is to assist fundamental investment managers incorporate these data sets into their investment process, differentiating them from other managers.
Private equity will also benefit from data analytics in both the due diligence stage as well as in managing their portfolio companies. Currently, most PE-backed companies have robust ERP systems that track significant amounts of information on a monthly or quarterly basis. The dilemma is that nothing is being done with this treasure trove of data. The analysis is still primarily driven by income statement, balance sheet and cash flow metrics as well as a few key headline metrics. Our data scientists help our clients organize their information, conduct predictive modeling and visualize in real time what is going on within the portfolio company. Data analytics will help both the management team as well as the investor understand how to improve operations to drive growth.
After twelve years of building a service offering focused on delivering accurate and timely work to meet our client's diverse needs, I believe we have proven that TresVista is a second generation KPO. The work does not stop here as we will continue to evolve our offering and add more value to our clients by staying ahead of industry developments.