The total portfolio approach gains momentum: Building the right tech foundation for success

Large investment managers are increasingly looking to manage their entire investment portfolios with a total portfolio approach (TPA). Oliver Johnson, chief revenue officer at SimCorp, explains the rationale for the trend and the crucial role technology plays in enabling such an approach. 

To what extent has the TPA model gained traction across the buy side and, typically, what types of buy-side firms have adopted the approach?

Oliver Johnson, SimCorp: In nearly every conversation we have with asset owners—pension funds, sovereign funds or insurance companies—we end up talking about TPA. However, it’s not the same on the asset manager side. While TPA has been part of the conversation we’ve had with asset owners for quite some time, I’d say it’s only now starting to become relevant for some of the larger global asset managers, because they’re looking to create more multi-asset strategies that span different asset classes and products. What we’ve seen across our client base is that adoption largely tracks operational maturity. Institutions with established data infrastructure and cross-functional governance structures progress faster than those still operating in asset class silos.

What is driving this shift to TPA among asset owners? Are they looking for greater diversification and exposure to new markets and asset classes?

Oliver Johnson: That’s a common misconception. Asset owners have been in private markets and alternatives for years. The shift to TPA is about optimizing across these asset classes. They’ve moved beyond the diversification phase and are now focused on how their entire portfolios work together to meet liquidity needs, risk allocations and return objectives.

Traditionally, firms had separate teams for fixed income, equities and private markets, each running strategies against their own benchmarks. TPA changes that by evaluating all investments together within a unified framework, eliminating silos that create inefficiencies and blind spots. It’s about extracting more value from existing allocations, not simply adding new ones.

What are the technology and operational components firms need to have in place to develop a viable, coherent TPA?

Oliver Johnson: To run your firm on a TPA, you have to rely on a robust technology infrastructure. You need to be able to manage all of your asset classes holistically, and you need a single source of truth that supports all the automated processes across the different asset classes. At the heart of this is SimCorp’s investment book of record (IBOR). It is ultimately the foundation that allows portfolio managers to see all of their asset classes in real time. The tech stack is critical, especially from a risk and liquidity management perspective, as portfolios become more complex with increased private market allocations. Real-time exposure visibility across all asset classes is now table stakes.

The IBOR has been core to SimCorp’s DNA for more than 25 years. What was the original vision behind that? 

Oliver Johnson: That was the foundational decision at SimCorp’s inception—to model every asset class natively from the ground up in the IBOR. That means all asset classes exist in the same book of record, a foundation that makes TPA possible.

The alternative approach—multiple fragmented systems with a data warehouse layered on top—only brings positions together on an end-of-day basis for consolidated reporting. We call that a “total portfolio glance”. You can’t perform risk, performance or compliance in real time with end-of-day data. For investment decisions throughout the day, you need a real-time view across all asset classes.

How does SimCorp help clients transition from legacy systems to a unified platform that enables TPA?

Oliver Johnson: Another misconception about TPA is that there’s only one path to implementation. In reality, the approach depends entirely on each institution’s operational readiness, risk tolerance and strategic priorities.

We see two main approaches. For example, one large pension fund recently came to us with multiple systems and initially asked us to layer on top of its existing infrastructure.

Through our workshops, they realized they needed to fix the problem at the source by capturing transactions in an integrated platform rather than reconciling outputs. The fund replaced its equity, fixed income, private markets and derivatives systems with SimCorp One in a comprehensive migration.

Other clients prefer a phased approach. They often start with private markets, which typically has the weakest infrastructure, then migrate equities and fixed income once that first implementation is live.

The industry agrees on the end-goal: an integrated front-to-back system supporting all asset classes. The question is whether to replace everything at once or migrate in phases. Industry consensus is clear: the foundation for TPA is an integrated front-to-back system supporting all asset classes. What varies is the path to get there—comprehensive replacement versus phased implementation. 

Time-to-market with new implementations is increasingly driving buy-side technology decisions. Firms want quick wins with phased deployments so that parts of the business can be up and running with at least some new functionality and minimal lag. Is that correct?

Oliver Johnson: Absolutely. We’re currently working with one of the industry’s largest asset managers that chose a hybrid approach, which entailed implementing the IBOR across all asset classes first, as this is at the heart of everything, and then integrating it with its existing systems and decommissioning those systems over time. This gives the asset manager the unified data foundation immediately while managing organizational change incrementally.

What differentiates SimCorp’s approach to IBOR and TPA from other providers in this space?

Oliver Johnson: What sets SimCorp apart starts with how we define IBOR, as the term has become diluted in the market. Our definition is precise: a single source of truth for all public and private markets investments that updates in real time, not start-of-day positions, but an immediate reflection of every trade, corporate action and cash movement.

That foundation defines our three core differentiators. First is our native multi-asset capability. We built every asset class from the ground up within the same platform. This isn’t bolt-on functionality or acquired systems stitched together—it’s integrated by design, which is essential when institutions need a unified view across their entire portfolios.

Second is open architecture with more than 160 partners. SimCorp delivers the IBOR core and handles integration complexity, although clients can access specialized functionality where they need it. Axioma is a good example of this. When SimCorp and Axioma merged, we integrated what was already the market’s leading risk management solution and portfolio optimizer, rather than building our own.

And third is our proven enterprise delivery. Large institutions choose us for our 50-year track record of successful implementations at the most complex organizations worldwide. When you’re replacing mission-critical infrastructure across multiple asset classes, execution risk matters as much as capability.

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