The people behind the analytics: Songezo Mngconkola and Dhruti Jeram

In this instalment, we speak with Songezo Mngconkola and Dhruti Jeram, both Senior Client Consultants in our Client Services team. With 11 and 16 years of experience respectively, spanning client implementations, data migrations, and client support, they work at the intersection of data, methodology, and investment decision-making. Here they discuss how South African asset managers and asset owners are responding as portfolios extend into private markets and offshore assets; how a poorly configured benchmark can quietly distort attribution; and why performance numbers alone are no longer enough.

Performance, risk and attribution are not explained by software alone. The people who understand what the numbers are saying play an essential role. In the people behind the analytics series, we speak to the Confluence^® experts who do just that across South Africa, working with the investment firms and service providers we serve.

We put five questions on performance, risk and attribution in South Africa to members of our local analytics team. Each conversation covers the challenges investment firms and service providers face, where they see analytics break down, and what becomes possible with the right set up?

Q: What is the most common question you are asked in your work with clients?

A: The most common question we are asked is “Which number is right?”. It usually comes up when a return calculated in Revolution is compared with a legacy system, a custodian’s figure, or the result an investment manager reported to a board. It is a reasonable question, and in most cases the discrepancy is not a calculation error, but rather the figures are answering different questions. One return may be time-weighted and the other money-weighted. They may use different valuation points, treat fees and cash flows differently, or handle corporate actions differently.

Another common area of inquiry is performance attribution, particularly the reasons behind outperformance or underperformance relative to a benchmark. Clients and investment teams want more than the outcome. They want to understand the drivers, including the largest contributors and detractors, because that insight feeds directly into investment decisions and portfolio construction. Revolution supports this with multi-asset attribution analysis alongside performance and risk, so teams can trace results back to their drivers in one place.

Q: What are South African asset managers and asset owners focused on right now, and how is that shaping the analytics they need?

A: The most significant development is the growing allocation to private markets and offshore assets. In South Africa, Regulation 28 has created additional capacity for infrastructure and private assets within retirement funds, and institutional investors globally continue to increase their exposure to unlisted investments. Together, these trends are changing how boards assess and interpret performance.

A portfolio of listed equities, infrastructure debt and private equity cannot be properly evaluated with a single time-weighted return. Trustees need to see both the manager’s performance and the fund’s actual return, which depends on the timing of commitments and drawdowns. Time-weighted and money-weighted measures should therefore be presented together, calculated consistently, and reconciled to the same underlying data.

That is why a significant part of our recent work has been Internal Rate of Return reporting. Revolution can produce both perspectives from a single, controlled data set across listed and unlisted holdings and multiple currencies. The firms doing this well are not adding a private-assets spreadsheet to their reporting packs. They are bringing all assets into one governed performance process.

Q: What is the most common mistake you see in how firms handle performance or risk, and what would side-stepping that unlock?

A: One of the most common mistakes is treating the benchmark as an afterthought. Firms put significant effort into making sure portfolio data is accurate but place less scrutiny on whether the benchmark is configured correctly for the mandate. The resulting issues are subtle. A blended benchmark may be rebalanced monthly when the mandate assumes daily rebalancing; the portfolio and benchmark may be priced at different times of day, or a constituent change may be loaded late. None of these necessarily produces an obvious error, but each can create active returns that are unrelated to any investment decision. Attribution then faithfully explains that artificial performance, while investment teams spend valuable time defending results distorted by data or configuration differences.

Another common mistake is treating performance and risk as separate disciplines. Performance tells us what happened, but without risk it lacks context. Risk without performance says little about how effective the investment decisions were. Viewed together, they give a fuller picture and support better conversations with clients, trustees, and consultants.

This is where Revolution helps. Benchmark configuration can be managed with the same rigor as portfolio data, including blends, rebalancing rules, currency treatment and pricing alignment, so active returns reflect genuine investment decisions and not operational inconsistencies. And because Revolution brings performance, attribution and risk together in one solution, firms can explain not only what happened, but why, and which risks contributed. The conversation moves from questioning the numbers to using what they reveal.

Q: What is the biggest change you have seen in how investment firms measure and explain performance and risk, and what do you see coming next?

A: The biggest change is the role of the performance team itself. Historically, performance was a production function: calculating month-end returns and distributing reporting packs. Today it is a broader control and analytical function. Performance teams are expected to identify data quality issues, validate valuations, reconcile results, and provide assurance that reported figures are robust before clients, regulators, boards or investment committees review them.

That has changed what is expected of performance analysts. The value is no longer only in producing a return, but in substantiating it, tracing it back to its data sources and explaining it clearly. Reporting has also become more sophisticated. Firms are now expected to explain the sources of excess return, distinguish skill-based from risk-based outcomes, analyze factor exposures, assess ESG impacts, evaluate downside risk, and show how portfolios hold up under different market scenarios. Regulation, client expectations, technology, and market complexity are all driving this.

Solutions such as Revolution support this shift by automating calculations and embedding controls throughout the data flow, so analysts spend less time on manual production and more on validation, investigation and interpretation.

Looking ahead, we expect investors to demand a more holistic view, with listed and unlisted, local and offshore assets measured consistently and explained within a single framework. Reporting will likely become more factor-based and more forward-looking, with outcomes measured against specific investor objectives. AI will play a larger role, from drafting commentary to answering portfolio questions, using AI tools like POINT™Prompt- a conversational interface for Revolution as well as other Confluence solutions. That makes the analyst more important, not less. The critical skill will be validating the analysis, challenging results that look unusual and understanding the underlying reason for the output. As insights become easier to generate, professional judgment and accuracy are what will define a strong performance analyst.

Q: Describe a client problem you enjoyed solving. What made it interesting?

A: One project we particularly enjoyed involved migrating a large institutional client’s performance history to Revolution and building their IRR reporting on top of that data. The client needed several years of history to reconcile precisely with their existing results before they could confidently adopt the new solution. The objective looked straightforward, but the real challenge was not simply loading the data. It was understanding how historical transactions, benchmark structures, classifications, methodologies, and reporting rules interacted to produce the final numbers.

What made it engaging was its position at the intersection of data and methodology. Every reconciliation difference pointed to an underlying issue. A variance in a single month could result from a corporate action recorded differently, a fee posted on a different date, a benchmark classification change, or cash flow allocated to the wrong period years earlier. Resolving them meant tracing each issue from source data feeds, through validation and transformation, to the final calculations and reports.

The most rewarding part was watching the client’s confidence grow. By the end, they could explain their historical performance more clearly, reconcile results with confidence and rely on a single controlled source for both time-weighted and money-weighted reporting. It reinforced what we value most: helping clients answer the questions that matter. Can they trust the data? Can they explain the performance? Can they make better investment decisions based on it?

For us, effective performance analysis is not simply about accurate figures. It is about showing how those figures are derived, helping clients understand what drives them, and giving them the confidence to defend and act on them.

An industry leader for over 20 years, Confluence Revolution

is trusted by investment firms and service providers worldwide, supporting over 100,000 actively managed portfolios.

Our South African specialists work with it daily, alongside clients, which is why the answers in this series are grounded in practice.

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