2015 European Private Equity and Real Estate Asset Servicers’ Survey

Executive Summary

In the light of their expanding client base both in terms of investor type and country of origin, asset managers have diversified into new fund domiciles and strategies. Asset servicers are reacting by adapting their offer to increase the country coverage and, in the second step, the breadth of services offered to asset managers. This will help to encompass more middle office services as well as services increasing numbers of investment structures between the fund and the targets). 

Asset servicers strongly believe that their business growth will be fueled mainly by new clients, while extending their activities with existing clients only comes second. This will put pressure on costs and increase the focus on the quality of services, and lead to fierce competition between established players and newcomers. 

Furthermore, regulations, market initiatives and investor pressures on asset managers are having knock-on effects for asset servicers. These include AIFMD, investor reporting standards (i.e., INREV and ILPA) and accounting standards (i.e., IFRS 9 and IASB/FASB). For asset servicers to be in a position to develop and concentrate on value-added products–the only true differentiator in the current climate–it is of paramount
importance that they invest in technology, and focus on operating models and organizational transformation.

Asset servicers are very positive and confident in the growth of the PE/RE industry, while also being aware of the significant challenges ahead of them for the next 12-24 months. Some asset servicers have already initiated internal measures to turn these challenges to their competitive advantage.