Q: How do you think SS&C has been able to outperform most of their competitors from a financial perspective?
WCS: It always comes down to people. Our people drive the business and they have expertise, commitment, potential and passion when they go about their daily work. They have to feel good about what they are accomplishing. They have to feel that what they do is important. We, in management, have to be aware that they are our most valuable assets; they are the crown jewels of the organization. I think we are passionate as a company to supply that information to our customers in a way that sets us apart from our competitors. We have been lucky enough, certainly I think lucky enough, to have consistent management. Since 1986, I have been the Chairman and CEO of SS&C. That's 22 years. While most people think of me as the Grand Old Man, I like to think that I have learned a lot and try not to make the same mistakes. It has been a great learning experience for me that I'm now able to help teach the organization about what matters to our customers.
Q: So how significant do you think the "company" aspect (i.e. people, financial stability) is to these institutions' decision to go with a vendor?
WCS: Well, it's paramount. These are large, sophisticated systems with a tremendous amount of knowledge and intellectual property embedded in them. The ability to maintain, advance, morph and interface with them is so important to the leading organizations in the world because their business is morphing all the time. Whether it is the mortgage business, the securities business or the derivatives business; each one of those is going through rapid change as more intelligence is brought to bear on the problems of finance in today's global economy.
Q: Is there any specific vertical market that holds particular interest for SS&C?
WCS: Not really. We like all of our verticals. What we are trying to do is make sure we have solutions to where the money goes. So if the money is going to go into real estate, we have great real estate property management systems, great commercial loan systems, and great information delivery capabilities to the real estate industry. If the industry is going to be into Fund of Funds, we have great offerings for Fund of Funds. Whether they are in global macro, or long/short, or paired trades, convertible arb or risk arb, we have solutions for them. We have the capability to allow them to do what they are very good at and we can handle the details for them and deliver the information that they need. So we don't really have any particular part of the financial services industry that we are more or less wedded to. We want to be the quality provider in each one of the verticals that we are in.
Q: How would you characterize SS&C's position in the market currently?
WCS: I think SS&C is recognized as a trusted partner with our clients. We do what we say we are going to do. It's not always easy but we are upfront with clients. We are a direct organization. We try not to sugarcoat things. We try to look at difficult issues and solve them. I think that's been a hallmark for us, whether it is implementing solutions for FAS 157 or FAS 115 and going back to FAS 91. SS&C is going to be expert in what we do. We come up with innovative solutions, commit to deliver those innovative solutions, and then we deliver them.
Q: Everyone seems to be talking about FAS 157. What kind of expertise do you have in-house and what kinds of solutions does SS&C have to help firms manage FAS 157?
WCS: We probably have 75 CPAs on staff. We have CFAs, we have masters in tax - we have all kinds of expertise that we can bring to bear that will help you with hard to value assets. We have models that we have built that do discounted cash flows and other techniques that will give you a range of values in which to understand the characteristics of any of these investments, allowing you to put a reasonable price on an asset. It doesn't allow you to put a perfect price on it because there is no such thing as a perfect price. It is an estimate of the value of that asset. We have great ways in which to justify the estimates that our clients are using.
Q: What do you think the future holds for SS&C and for the financial services industry?
WCS: I think right now the financial services industry, in particularly Wall Street, is going through a rough patch. I think that the talent, skills and abilities that are resident in Wall Street are such that it will morph itself into another highly profitable, growing enterprise. That is what the smartest humans on the planet do and an awful lot of the smartest humans on the planet are in Wall Street. So I think that the financial services industry in the United States and around the world is going to be an excellent place to be. I think it will continue to grow. The world is getting wealthier, whether that is China, or India, or Brazil, or Russia, amongst others. There is wealth being created around the world and I think that SS&C is uniquely positioned to be able to deliver solutions for that wealth. And that wealth is generally cycled through financial services organizations which need sophisticated accounting and reporting systems. As regulators try to manage this around the world, they come up with increasingly sophisticated metrics on risk and capital and customer. I think SS&C, again, is uniquely positioned to deliver those solutions in a cost effective way that is good for our customers, good for our employees and good for our shareholders.