Comment: Developing a successful fund management business in the era of the investor
David Morrissey (pictured), New Business Development, Europe and the Middle East, SEI’s investment manager services division, looks back on 2009, 'the era of the investor', and what's next for 2010.
Managers are being driven by their investors to have a transparent, independent, and process-driven operational environment. In this ‘Era of the Investor,’ managers need to have an operational environment that incorporates audit controls, data governance, and effective risk reporting.
Not surprisingly, these are also of extreme importance to regulators and, when done right, help to demonstrate that a firm is well run and has adequate risk controls and a robust infrastructure in place.
Data management and governance is of increasing importance to managers. The right data management process can improve accuracy, facilitate decision making and provide a more timely and comprehensive assessment of a manager’s business across all investment products. To be truly effective, it must capture data generated from the front-, middle-, and back-office functions and it must follow a very thorough and standardised process.
The Middle East fund industry is emerging rapidly and we believe that local managers may soon start branching out internationally by distributing their products utilising a UCITS structure. With a wealth of local knowledge and expertise, some of the leading investment managers in the region believe that they are ideally positioned to market successfully to international investors who have shown increasing interest in the region.
Investment managers often view the operational aspects of their businesses as non-strategic and sometimes as merely a necessary evil. However, in today’s environment of increased regulatory complexity, investor transparency demands and resource challenges, middle- and back-office functions need to be more strategic than ever. That’s why many managers are currently reviewing their operations and taking a strategic look at outsourcing – they realise that with the right partner, the right technology and the right approach, operations can be converted from a basic cost centre to an opportunity centre.
By relying on an experienced outsourcing partner for back and middle office functions, managers can create the opportunity to not only gain better analytical tools and data quality in support of trade execution, portfolio analysis, and investment compliance and keep up with the latest technologies while lowering fixed costs, but through this outsourcing, they can also focus more on the core aspects of their business and their investors.
We believe that this additional focus on their core business and those additional investments in the investor will yield tangible returns - returns in the form of stronger client relationships, returns in the way of greater innovation and returns from improved investment performance.
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