J.P. Morgan Asset Management (JPMAM) has announced plans to create a new global operating model by outsourcing investment middle office services capabilities.

The asset manager says that J.P. Morgan’s Securities Services division, which is part of the Corporate & Investment Bank, will be the provider to support the new global operations structure.

The bank says that outsourcing these services will enable JPMAM to drive value for its clients through investment expertise, insights and performance results while leveraging the expertise and scalability of other parts of the firm.

The move will also ensure that JPMAM can create a service-oriented, scalable, end-to-end operating platform that will enable greater business growth.

JPMAM is commencing a multi-year initiative to implement this model, which includes the provision of middle office services, collateral management and risk analytics.

These new services add to the custody and accounting services that J.P. Morgan already provides to JPMAM.

The first phase is planned for mid-2022, when J.P. Morgan will provide operational processing support for a range of derivatives products. 

This change will enable JPMAM to efficiently implement the use of new and different products, thereby expanding its derivatives capabilities.

Subsequent phases will commence in 2023, and will involve migration of the operational servicing of other asset classes.

Global Head of Operations at J.P. Morgan Asset Management, Fred Crosnier says that the diverse nature of the JPMAM business across different market sectors, investment products, asset classes, vehicles and jurisdictions requires a service provider with extensive scale and capabilities to meet those needs. 

He adds: “We reviewed a number of alternative strategic operating models and after extensive due diligence selected J.P. Morgan.

A new globally consistent Investment Book of Record facilitates our investment decision making process and enables us to seamlessly add new product capabilities.”

Andrew Powell, Chief Administrative Officer and Global Head of Client Service, J.P. Morgan Asset Management added: “Working with a leading provider like Securities Services, who can deliver the scale and capabilities to support our investment activity from end-to-end, allows us to focus our resources on investing for our clients.

Continued downward pressure on fees and expenses means that asset managers need to deliver an exceptional investment experience while also creating efficiencies and economies of scale in middle or back-office services.”

Scott Bevier, Global Head of Investment Operations Services, J.P. Morgan, said: “Clients are requiring ever-increasing support from their middle office provider, to both enable their expansion into more sophisticated investment strategies as well as deliver continuous operational scale and efficiency. 

As a leading custodian service provider affiliated with the number one markets franchise, we are uniquely positioned to provide solutions to enable our buy-side clients to leverage the full breadth and depth of our expertise, systems, and global scale & connectivity. 

We’re excited to expand our long-standing partnership with JPMAM by delivering these next-generation capabilities.” 

 

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