How can investment managers supercharge their alpha?
The financial turmoil followed by the European debt crisis sparked an urgent search within the investment management sector for alternative
strategies. Declining market valuations leading to decreased assets under management, new demands from regulators for greater transparency, and the increased presence of online broker platforms have all converged to drive down management fees while operational costs continued to rise.
These developments combined have had a huge and negative impact on organizational profitability and returns for the entire sector. Furthermore, over the same period, investment managers have faced continued challenges regarding their off-the-shelf trade management solutions. The implementation and configuration of such solutions can only be done with the support of an expensive vendor consulting force,
whose knowledge and focus is limited to the one component of the overall trade cycle. The objective of achieving a fully integrated and seamless trade management solution becomes ever more elusive.
The investment manager must be satisfied with the consultant knowing their own system by heart whereas in reality the vendor specialist will fall back on the specific knowledge of the platform available with his colleagues. Furthermore, these systems, first developed in the early nineties, have become legacy and even obsolete from the current technological perspective. As markets have slowly recovered, there is momentum for the investment management sector to redefine the course of the future. Validation of the organizational mission and strategic goals will be essential in a world that has changed drastically.
Performance magazine issue 18, September 2015
Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.