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Justin Schwartz, DTCC Director, Alternative Investment Products
Justin Schwartz, DTCC Director, Alternative Investment Products.

The Depository Trust & Clearing Corporation’s (DTCC) Wealth Management Services (WMS) division recently expanded and realigned its support team to enhance its ability to deliver processing solutions for the alternative investments, insurance, retirement and mutual fund marketplaces.

DTCC Connection is speaking with four business leaders to delve into key WMS initiatives in this Perspectives series. The conversation begins with Justin Schwartz, Director, Alternative Investment Products, who discusses the group’s latest product strategy developments and the market outlook for alternatives. In his new role, Justin is charged with delivering products that meet market needs, managing client committees and driving the growth of this agile platform.

Can you begin by describing one of the latest initiatives WMS has undertaken for AIP?

Our recent enhancement to the AIP platform that fully automates internal account transfers comes to mind first.

We were hearing feedback from the broker/dealers in our client community that they were struggling with the manual operations required to re-register accounts in non-traded real estate investment trusts (REITs) and business development corporations (BDCs). They were inundated with paper trails, multiple registrations and time-consuming inter-departmental hand-offs. With the launch of the automated account transfer service, this process is now achievable in a single day. This also helps our clients mitigate risk in their daily operations and allows them to focus more on growing their business.

What other initiatives are in the works?

We are in the midst of enhancing client support with two key initiatives. The first development, the Client Support Portal, will expand DTCC’s Connectivity, Activation and Production Support (CAPS) team’s ability to deliver improved client assistance by providing them with direct access to the data and information available. This also allows us to leverage the AIP support hotline to cover a broader range of service hours in tandem with this enhancement. Later in the year, we will introduce a web platform where our clients can seamlessly input data, view transactions and quickly implement key aspects of AIP without the need for a full-scale build.

What is WMS’ approach when developing these initiatives?

All of our initiatives are developed in conjunction with committees to best serve the alternative investment community. Prior to AIP, these collective groups didn’t exist. As part of our overarching strategy, we’ve formed an Executive Advisory Board (EAB) and an AIP Roundtable group, representing a diverse cross-set of market influencers and clients. Take, for instance, the account transfer enhancement; it was a direct result of feedback we heard from our Roundtable community and put into action.

What has been the most compelling takeaway from the AIP industry groups?

Members of the Executive Advisory Board (EAB) and Roundtable have really coalesced around the opportunity to exchange information and collaborate with their industry peers. As a developing asset class, alternatives are inherently less standard and more disparate than other investments, making information sharing a challenge. Our dialogue with these groups is bringing clarity to the alternatives marketplace and informing our AIP strategy.

How does the product strategy team fit into AIP overall?

We have a two-pronged approach to the AIP business model. Business development, led by Frank Gaffney, is AIP’s front-door to clients, educating them and any interested users about the service and focusing on long-term opportunities. My area, product strategy, supports the evolving alternatives world by anticipating, vetting and delivering solutions to meet marketplace demands. In my role, I take a forward-looking approach and collaborate with clients to get a pulse on key trends and opportunities in the alternatives space.

Can you speak about AIP’s growth trajectory?

All of the project developments in the pipeline will help grow the AIP client community – providing clients with a more powerful platform, better access to data and the ability to automate their business while reducing risk.

Today, the AIP platform includes more than 2,000 funds and continues to expand without attrition. Last year, the majority of transactions processed by AIP were non-traded REITs and BDCs. In addition to growing transactions for these two asset classes, we expect the next frontiers to be focused on hedge funds, private equity and institutional clients. With the flexibility and scale built into AIP, we are well-poised to meet demand in all of these markets.