« Over the past ten years, the asset management industry would have shrunk by 7% if not for the launch of new funds » *
Innovation is a key factor in a European asset management market where capturing new fund assets is a daily challenge. Asset management firms must conceive their products faster, cheaper, more secure and in line with investors ‘needs in the current global environment. The expertise deployed relies on increasingly complex financial instruments and on an investment process that requires a precisely orchestrated implementation of management actions, using investment vehicles with various components (non-listed, listed real estate securities, commodities, debt, soft trade, swing pricing…). In close cooperation with asset managers/institutional investors, Fund Servicers have built and designed comprehensive technical solutions (including regulation, risk and cost control) that embody the asset manager’s vision (middle-office OTC…) and go beyond setting up precise and specific processes for NAV calculation, taking into account the particular features of product and investment processes. The tendency for asset managers to adopt business models that separate product design and management activities from production activities (supporting those core activities) leads to a strong specialization in the value chain of the industry. On the one hand, this helps mitigate any financial impact in case of failure, and conversely, it helps to react more swiftly to the success of a savings vehicle [in search of « nimbleness »].
Playing an active role in market segmentation, Fund Servicers are able to provide service modules (trade matching, position keeping, compliance, pricing, investor communications, cross-border tax reporting, client reporting, external performance, risk, and performance measurement and attribution, …) that are adjusted to their partner’s size, taking into consideration all the specific features of their products whatever their degree of complexity, and designed using industrial processes (secure workflows). The need for ensuring confidentiality, putting their clients’ interest first, and providing an expert, reliable service of the highest quality are the guiding principles driving this professional relationship day to day, and guaranteeing a robust offering from these independent market players. While product design centers are remotely located as a result of outsourcing these activities, new interactive tools (NAV validation, file queries…) have been developed to bring things closer to the user. Today, the ability of Fund Servicers to invest in sophisticated tools and pool their skills for the benefit of their clients allows them to go beyond the role of mere service providers to become partners bringing real solutions to the new demands of investors.