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Accelerating Growth through Operational Transformation Across the Trade Lifecycle

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Mac Kirschner, Chief Operating Officer

Navigating turbulent markets and inflationary pressures are challenging as funds compete for capital, tackle evolving regulatory mandates and wrestle with outdated technology. To better position themselves for the future, we’re seeing alternative fund managers increasingly reevaluating their processes to improve speed, cost and impact.

While fund managers historically have looked to outsourcing partners for help with middle- and back-office functions, we’re hearing more and more from clients that they want help examining their front-office activities as well. For example, rather than focusing only on “back office” post-trade settlement or accounting, clients are rethinking how to manage “decision” functions for a broad range of key services, including client onboarding, trade execution and investor reporting.

This evolution is not surprising. While clients continue to make key investment decisions to increase revenue and returns, it’s clear that outsourcing to reconfigure operational functions is an effective cost and risk mitigation strategy. And with the tightening of direct remuneration to investment managers, it’s clear that outsourcing is a vital toolset for managers to maintain and generate as much margin as possible.

In our conversations with clients, it’s clear they understand that they can either spend the time and money to train staff and rebuild processes and legacy technology to accommodate industry changes, such as accelerating settlement in the U.S. to T+1, or they can outsource that work to a trusted partner.

By outsourcing to these partners, clients can focus on generating returns for their investors and be confident that their critical functions are being handled by firms that invest in resilient, state-of-the-art technology, closely monitor regulatory changes and have highly skilled teams, in close time zones to execute on their behalf. One example is our “near-shoring” strategy coupled with a follow-the-sun model, which enables us to support client operations in any number of global markets by having direct and adjacent footprints in the world’s largest financial centers.

While we continue to help clients address concerns about specific processes or issues, we’re seeing more clients asking for holistic or “big picture” views of what’s working, what’s not and how functions can be streamlined and improved. Often, they’ll ask our experts to evaluate all their operational infrastructure and we offer suggestions for reconfiguring technology, systems, and processes. And now that work is moving to front offices as well, as we assist clients with trade execution.

The inherent value of that “cleanse and reset” approach not only provides more efficient operating models, but also means that clients receive a full assessment of existing and potential risk. By supporting the full trade lifecycle, from trading to post-trade settlement and administration, we become an important part of their audited control environment and are responsible for building optimum solutions to remedy risks.

These relationships often have long-term benefits as well. As employees move around the industry or new funds open, firms want someone they can trust to help plan next steps. In just the last few years, executives at several previous client companies have engaged us at their new firms, proving once again that clients know their performance is our priority.