How fund operators can leverage data and operations after COVID-19
Experts from leading fund operators Baron Capital, Sanlam Investments, Savills Investment Management and Northern Trust examine industry trends in a post-pandemic world.
Fund Operator Editor POSTED ON 2/14/2022 4:11:25 PM
In a roundtable discussion market leaders in fund operating share their strategies on client engagement.
Clear Path Analysis’s recently released Fund Technology, Data & Operations, Europe 2022 report includes industry leaders from companies such as Storebrand Asset Management, Invesco and Broadridge address key concerns related to data management including the availability, quality, and maintenance of data.
"The panellists believed that the pandemic had shaken up traditional business models."
Roundtable panellists included Stephen Millar, VP, Head of EMEA, Baron Capital Management, Bruce Simpson, Head of Distribution, Sanlam Investments UK and Michelle Sartorio, Global Director of Marketing & PR, Savills Investment Management. The discussion was moderated by Katharine Morris, Head of Global Fund Service Business Development, Northern Trust.
The panellists believed that the pandemic had shaken up traditional business models. “New behaviours have been created over the past 12-18 months because of Covid-19 and there is a much greater desire to use emails and webinars,” said Millar. This digital trend will likely continue with WFH penetration expected to increase from 21% pre-pandemic to 63% post-pandemic, according to a Morgan Stanley Investment Management survey in 2021.
“This [use] has started to become engrained, particularly in the wealth and wholesale space where there doesn’t seem to be as much of a desire to do the one-on-one meetings,” he added.
"Several panellists said technological developments were moving swiftly."
According to McKinsey research, during the first part of the pandemic, respondents said they were three times likelier than before lockdown to say that at least 80% of their customer interactions are digital in nature.
Several panellists said technological developments were moving swiftly. “I never thought I would see the day when you had big due diligences checks around multimillion deals, but you are just doing remote Zoom calls and making decisions off the back of them,” Morris said.
However, changes that are taking place on the investment side are not necessarily being reflected on the institutional and business side of the industry.
"The reporting, data, and integrity of information related to ESG has been developed further"
The panellists said that boutique firms are joining in on the trend of centralising their IT structures so that they can diversify their portfolios in the uncertain market. “There has been an enormous amount of consolidation in the industry, into the largest asset managers, who have over 30% of the globe’s assets under management,” Simpson said. “So, for boutique firms, there is a need to diversify, distinguish and differentiate ourselves through the types of strategies that we run.”
The panellists also stressed that the reporting, data, and integrity of information related to ESG has been developed further, especially in terms of what institutional clients need for their due diligence for regulatory reporting - though different sectors were seeing different trends, it was noted. ESG regulation has become increasingly fraught with new reporting and disclosure requirements, some compulsory and some voluntary, in recent years.
The pandemic has changed what the market was seeking from certain sectors as well. “Post-pandemic there has been a huge interest for alternatives, and private equity has a growing exposure to real estate infrastructure,” said Sartorio. “In 2021, if you already had exposure to the typical asset classes in your portfolio, alternatives became a gold mine and proved to generate the expected returns that investors were seeking.”
To read the report in full click here.
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