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Andrew Rafalaf
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PIMCO Takes TenFold's Revenue Manager

Pacific Investment Management Corp. has licensed TenFold Investment Management's Revenue Manager to automate client fee billing and accounting.

Pacific Investment Management Corp. (PIMCO), the fixed-income division of Pacific Advisors, has licensed TenFold Investment Management's Revenue Manager to automate client fee billing and accounting. PIMCO, with about $185 billion in assets under management, decided to discontinue maintaining its proprietary fee billing system, so that it could focus its IT efforts on mission-critical analytical applications.

"I can't tell you who else we looked at, but the clear front-runners were our legacy system and TenFold's Revenue Manager, " says George Allan, senior vice president at PIMCO. "We decided to focus on our core competency-building analytical applications-and outsource billing so we could focus on our business needs, which is obviously maximizing return on investments."

He did admit that Revenue Manager will be much easier to use, as it allows changes to be made to billing structures almost on the fly, without any need to hard-code the changes. Michele McGovern, president of TenFold Investment Management, explains that Revenue Manager was designed with the large institution in mind, one with many clients and varying fee structures.

"Five years ago, there were more standard ways and fee schedules per product," McGovern explains. "The market has changed, though. There are many new products, and firms need to be flexible and customized in the way they service their clients."

Pointing to two generic firms that both manage index funds, she says there is little inherent difference in the funds, so the firms must distinguish their products with different fee structures. For the actively managed fund, clients with larger investments expect some graduated billing methods that reward them for a larger investment.

PIMCO will be hooking the system up to its own proprietary investment accounting engine, SMARTS. The firm expects to run Revenue Manager in parallel with its current system during the second quarter billing cycle, which occurs at the beginning of July, and Allan is certain the firm will drop the older system completely in the third quarter.

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