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Merger: MFC Global Investment Management and John Hancock

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FalconRock-John Hancock Investment Management John Hancock Investment Manag e1739276815109

Financial Corporation Global Investment Management and John Hancock, both prominent players in the investment management industry, embarked on a merger to consolidate their operations and leverage synergies. The merger aimed to streamline processes, reduce costs, and enhance overall efficiency.

Objectives

  • Develop a Strategic IT Integration Architecture: Create a comprehensive IT integration plan covering trading systems, post-trade settlement, and sales systems.
  • Reduce Operational Expenditure: Achieve significant cost savings through system consolidation and process optimization.
  • Enhance Trading and Settlement Capabilities: Improve the efficiency and effectiveness of trading and post-trade settlement processes.
  • Vendor Selection and Implementation: Evaluate and select appropriate vendors for various systems and tools to support the integration.
  • Risk Reduction: Minimize market, operational, counterparty, and legal risks through best practices and automation.

Solution

  • Strategic IT Integration Architecture: Developed end-to-end IT integration architecture and globalization strategy, focusing on trading systems, post-trade settlement (EQ, FI, FX & Derivatives), and sales systems. This involved close collaboration with the COO, CTO, and sales teams.
  • System Consolidation and Cost Modeling: Consolidated systems, conducted numerous technical product and vendor evaluations to fill the capabilities map to derive earned value synergy realizations.
  • Post-Trade Settlement Re-architecture: Re-architected post-trade settlement processes and selected vendors using a weighted average methodology, in-house vs. outsourced analysis, and a 5-year TCO analysis. Integrated six applications using SWIFT with CLS for equity, fixed income, foreign exchange, and derivatives.
  • Derivatives Processing Re-architecture: Re-architected derivatives processing by integrating revaluation data, automating OTC derivatives processing, and reducing risks through best practices by ISDA.
  • Vendor Selection and Implementation: Selected and implemented vendors for various systems, including Execution Management System (EMS) RealTick, FX Connect/GTSS, FactSet feed enhancement, Satuit CRM globalization, and FIX network replacement to TradeWebFIX. Re-engineered systems and business processes to support intra-day pricing for trading and operations applications.
  • Trading Tools Enhancement: Identified and made a business case for trading tools that enhanced execution capabilities, such as Event Monitor, ITG-POSIT, SSB Financial Sockets, and Pulse trading.

Tangible Results

  • Merger Annual Cost savings realizations of $25.6 million.
  • Additional Annual  Recurring savings: identified in excess of $315,000, with software license consolidations
  • Risk reduction: reduced market, operational, counterparty, and legal risks through automation and best practices.
  • Enhanced efficiency: improved trading and post-trade settlement processes, leading to better execution capabilities and support for intra-day pricing.
  • Vendor optimization: successfully evaluated and implemented vendors, resulting in cost-effective and efficient systems integration. This merger project showcases the successful integration of two major investment management firms, resulting in significant cost savings, enhanced efficiency, and reduced risks.