As we close the books on a tumultuous 2022—in which the industry lost a combined $208 billion of client cash[1] and saw $111 billion in investor withdrawals[2]—managers will need to pivot their approach to attract and retain investors. True differentiation will come down to excelling in those areas that matter most: investment performance and client service. Firms can look to managed services to provide that edge.
The term managed services is a broad concept encompassing various services, from hosting technology to a full lift out of a firm’s operations. In the past, many fund managers were not as receptive to outsourcing parts of their business. However, as cloud deployment’s value is increasingly recognized, firms are progressively more open to outsourcing their operational tasks. The shift in favor of managed services offers productivity gains for firms and empowers them to launch new products and enter new market segments more efficiently.
What is Managed Operations?
Fund managers are searching for the best means to leverage managed services for their situation; many require a degree of service beyond technology hosting but want to maintain control. For these firms, the managed operations approach is the preferable choice for those seeking to take advantage of the flexibility and convenience of managed services. These dedicated teams of operational experts offer tailored support for a wide range of operational services, including reconciliation, reporting, performance management, and data services, to name a few.
The managed operations model is exceedingly customizable, allowing operations teams to choose which operational tasks to keep in-house, and which to hand off to their managed operations partner. This technology partner becomes part of the operations team rather than replacing it.
Freedom to focus on your business
As fund managers look to broaden their asset class coverage and satisfy client and regulatory expectations, delegating low-value and repetitive operational tasks, like reconciliation, to an external expert grants a firm the capacity to concentrate on investment strategies, business growth, and building relationships with clients. The managed services option provides the balance many organizations seek: authority over systems and data while freeing up resources and increasing scalability and productivity.
There is no crystal ball for predicting market returns. However, leveraging a managed operations team will be a key driver for firms as they differentiate their firms and build out investment strategies for the year ahead. For more information on what to look for in a managed services provider, read our guide to determine the best offering for your firm: Five Key Questions: What to Look for in a Managed Services Provider, or to learn more about SS&C Advent, request a demo.
[1] Hedge funds down combined $208bn in 2022, biggest loss since 2008. (2023, January 24) Retrieved from: https://www.hedgeweek.com/2023/01/24/319197/hedge-funds-down-combined-208bn-2022-biggest-loss-2008
[2] Investors pull $111bn from hedge funds in 2022. (2023, January 26) Retrieved from: https://www.hedgeweek.com/2023/01/26/319233/investors-pull-111bn-hedge-funds-2022
