A new survey of 48 firms shows a marked split on the buy side between those with a long-term plan, and those without one.
The study's respondents, a little more than half of which manage at least $20 billion or greater in assets, broadly noted variations in regulatory reporting requirements as their greatest operational challenge, and listed the Foreign Account Transaction Compliance Act (Fatca), AIFMD in Europe, and Dodd-Frank in the United States as the highest jurisdiction-specific hurdles at 55, 44, and 39 percent, respectively.
Specific investment strategies driving those complexities include increased allocation to hedge funds (63 percent), registered mutual funds (55 percent) and private equity (54 percent). Interestingly, however, a lion's share of the respondents, almost 60 percent, still fell into the lowest category in terms of overall IT investment at $50 million or less. Meanwhile, the number of firms using four or more portfolio and accounting systems (32 percent) lingers just beneath those using a single consolidated system (39 percent).
“As the details of regulation continue to be fleshed out and new requirements take effect, the resources of most asset managers and servicers are still consumed by compliance," Denise Valentine, senior analyst at Aite Group, says. "But many firms who put technology purchases on hold during the financial crisis are now resuming enhancements to their fund accounting systems and associated middle- and back-office solutions, with the desire to become more efficient, automated, accurate and service-oriented. Given the many changes to market and industry infrastructure in recent years, it is hardly surprising that organizations are still grappling with core operational issues. The improvement of efficiency and automation is an ongoing process that, as challenges continue and new lessons are learned, will need to constantly evolve.”
Victor Anderson, who is in town from London, joins Anthony and James to dig into the key themes from Waters USA.Subscribe to Weekly Wrap emails
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