As Siepe’s Director of Middle Office, can you tell us a bit more about your role?
I oversee the development and delivery of Siepe’s Middle Office solutions, with a particular focus on how we can further automate workflows for the fund management community. This means identifying areas that have historically been inefficient, such as reconciliation and reporting processes. These are still, surprisingly, very manual, with key functions in cash forecasting and projection often managed using spreadsheets. Not only is this time-consuming, but it opens the doors to human error, which can have severe consequences, including increased risk of defaults and breaches of covenants.
Solving these inefficiencies presents a valuable opportunity for us to enhance our product. By streamlining workflows, we allow fund managers to focus on more strategic, high-priority decisions.
Before Siepe, you’ve held roles in both financial services and banking in the CLO space. Can you tell us more about your background and how the industry has evolved over time?
I ended up in the credit and CLO industry by chance. Early in my career, I was with Arthur Andersen working with trustees. From there, I moved to work at J.P. Morgan, where I handled trustee deals, including one of the very first distressed CLO transactions. In 2003 I joined JPM’s trustee deal closing team and later moved to the default team to liquidate CDO transactions. I returned to the CLO space at Virtus Partners, where I worked in client service to develop solutions that supported CLOs and alternative investment strategies.
Over my career, the CLO and credit space has evolved tremendously. Deals have grown in complexity, investor behaviors have shifted, and access to data has become far more streamlined. I can still remember the days when ratings for CLOs had to be found in books! Today, fund managers have tools that seamlessly integrate this information into their workflows.
Reporting has also become more comprehensive and critical to the industry. CLO structure testing, for instance, is far more rigorous now, especially for credit quality and cash flow. This was evident during the global pandemic, which triggered major shifts in the market and drove a significant deterioration in credit quality. At that time, many testing models failed to ensure that CLOs were performing as intended. Consequently, fund managers placed higher scrutiny on deal structures and indenture clauses. This was to avoid the risk of defaults and shortfalls in cash flow if a firm is unable to meet its obligations.
What are the main challenges facing the industry, particularly in relation to private credit?
Data transparency and quality are the biggest challenges. In the loan space, there are significant inefficiencies in understanding and managing data flow. Believe it or not, fax machines are still used for trading syndicated loans between fund managers and agent banks. This is mainly because they do not have access to an electronic system to update transactions at that level. Fund managers are asking for solutions that can process this information in a timely and accurate manner, with precise details at the attribute level.
In private credit structures, data transparency and quality are a whole different animal. Unlike syndicated loans, which involve multiple lenders, private credit deals typically have only one lender. There is also a lack of standardization, with each borrower and lender potentially having different documentation, reporting standards, and data formats. Fund managers need to be able to access accurate, reliable data as early as possible as it can offer a significant competitive advantage when assessing risk and performance.
What makes Siepe a frontrunner in providing innovative technology solutions for fund managers?
Incumbents have been resistant to change. The technology they use can be slow and inefficient technology, making it challenging for fund managers to scale their business and improve trade processing. In contrast, Siepe adopts a completely different approach. Our technology responds quickly to the market, and our platform has been built to accommodate all different, disparate data sources – enabling fund managers to access timely, accurate data and make more informed investment decisions.
We also pride ourselves on collaborating closely with our customers. By listening to their specific needs, we can develop tailored solutions that improve their operations. This includes exploring ways to incorporate emerging technologies like AI and Machine Learning. As a result, we are able to lead the way in bringing significant improvements to workflow efficiency, not only in middle-office functions, but across an entire organization.
What is a fun fact about yourself?
My husband introduced me to the world of CLOs when he recruited me to Arthur Andersen, and we later worked together at JPMorgan before getting married. We’ve now been married for 21 years and have two young boys who keep me busy with school activities.
Despite working for a Dallas-based company, I’m still a dedicated Houston Astros fan!
