Investment

Dave Duffield, the cloud, unifying asset management systems…and family offices

Set to reach 80 in September with wealth approaching $14.5 billion, Dave Duffield never needs to work again. But he has a problem. He loves his job too much.

He is pushing ahead with the development of Ridgeline, a fintech business out to unify asset management systems and put them in the cloud with Amazon Web Services.

Many fail to recognise that modern asset management is a tech-driven business rather than a world created for stock pickers

To get results, after developing software giants like PeopleSoft and Workday, Duffield is renowned for hiring, and retaining, people with the right talents. He has 100% staff approval, according to data provider Glassdoor. 

Ridgeline has started to develop systems with six clients with assets ranging between $1 billion and $100 billion in the ultra-high-net-worth and institutional management sectors.  The system is not yet being marketed generally, but it could appeal to family offices who can underinvest on systems, often to the extent of still using spreadsheets. 

Moving a money manager to the cloud feels like a big step. But, according to one London-based adviser: “Ridgeline is bang on the money in terms of the direction of travel.” Another said: “I’m told it’s going to be really big.”

Mistakes have been expensive in the past. In 2017, for example, Old Mutual Wealth wrote off $450 million after deciding a system being built by IFDS would not work and replacing it with FNZ.

Taken in the round, systems have improved. But when Duffield started Ridgeline he knew asset managers still had problems with their systems, including problems they scarcely knew about. 

This reflects a failure to recognise that modern asset management is a tech-driven business rather than a world created for stock pickers. 

Ridgeline’s Chris Flynn says record books for investments, accounting and performance are currently kept in separate systems and sourced from different vendors.

“But even when they are from the same provider, they often operate on separate databases, architectures and user interfaces.” 

This leads to problems with reconciliation, corporate actions and other functions. Managers get along, putting loosely integrated patches and updates on their platforms but their systems can be twenty years old. 

Ridgeline’s solution sets out to use a single journal of record built around double-entry accounting where positions, trades and cash are reconciled daily.

Each part of the system is programmed to decide whether to process a change or ignore it. Once items are processed, corporate actions, trades and cash contributions enter the entire system, which picks them up, or ignores them, as required. Updates happen continually, rather than being batched.

The security of data and disaster recovery are dealt with in partnership with Amazon, which runs the cloud operation, while Ridgeline works with its asset manager clients.

Rather than using in-house risk analytics like Aladdin, Ridgeline sets out to integrate a manager’s favoured risk analytics provider.

Duffield based Ridgeline in Tahoe, North Nevada making it attractive to young coders who like to work and play hard. Duffield also has a soft spot for animals, contributing generously to their welfare.

He started out as a systems engineer at IBM, where he developed a healthy respect for its management style. He has learned that software only works when the right staff are happy, incentivised and never want to leave. A similar approach is taken by rival software provider Salesforce, drawing on the experience of successful family businesses.

His first large business, PeopleSoft, was renowned for supplying software for human resource management. 

It was bought for $10.3 billion in 2005 by Larry Ellison’s Oracle, which soon cut the combined workforce by 5,000.  The news would not have impressed Duffield.

Determined not to give up, at 64, Duffield co-founded a competing company called Workday which uses the cloud to offer human capital software as a service. 

Workday’s early backers included Amazon’s Jeff Bezos and the business listed in 2012. Its current market value is $60 billion following a storming five years. Duffield chairs Workday and retains a fifth of the business.

Subscribe

You will need a Premium Plus Subscription to access this database.

Exclusive news, analysis and research on global family enterprise and private investment offices.

Access to the most comprehensive fully interactive database on global family offices, principal investment offices, and family enterprises.

Check Deal Data, Senior Staff, and New Analysis on more than 500 family/principal investment and holding groups

Already have an account? Login

Subscribe

You need at least a Premium Subscription to read this article.

The most comprehensive information service on the global family enterprise world, featuring exclusive news, analysis, research and data on global family enterprises, family offices, and private investment offices.

Premium

£299

per year

  • Exclusive reports, analysis and commentary
  • Exclusive access to family/private investment office deal information
  • Exclusive interviews with principals and senior management of family/investment offices
SUBSCRIBE NOW

Premium+

£399

per year

  • Access to All of Premium
  • Access to all of FamilyCapital Analytics, our interactive database with more than 500 detailed profiles of family investment groups

More Info

SUBSCRIBE NOW

Already have an account? Login

You've reached the end.

Continue reading free articles by registering as a Member.
Or choose a Premium Plan.

Membership

Free

  • Exclusive reports, analysis and commentary
REGISTER NOW

Premium

£299

per year

  • Exclusive reports, analysis and commentary
  • Exclusive access to family/private investment office deal information
  • Exclusive interviews with principals and senior management of family/investment offices
SUBSCRIBE NOW

Premium+

£399

per year

  • Access to All of Premium
  • Access to all of FamilyCapital Analytics, our interactive database with more than 500 detailed profiles of family investment groups

More Info

SUBSCRIBE NOW

Already have an account? Login

Leave a Reply