Investment Operations - challenges and solutions

Solving the Challenges faced by Investment Operations

Investment firms inhabit a world where data is king, where technological change is constant and where regulations and compliance requirements continuously evolve. With margins being squeezed in many firms, the pressure is growing for greater efficiency, accuracy and resilience within investment operations.

Below we highlight some of the best investment operations papers to have been published on the Savvy Investor platform in the last couple of years, covering a variety of systems, technology and back office issues.

FEATURED REPORTS

2019 North American InvestOps Report (SimCorp)

Produced in conjunction with WBR, this 21 page report is built around the responses from a North American survey of senior leaders working in Investment Operations roles. The report examines the challenges facing asset managers, insurers and pensions organisations and the steps they are taking to address strategic issues relating to investment systems and processes.

2019 European InvestOps Report (SimCorp)

This 20 page report is based on the results of a survey of senior UK and European executives working in Investment Operations. It discusses the systems and processes issues facing investment, insurance and pensions organisations and the steps they are taking to address the strategic challenges in this area.

BACK OFFICE SALARIES

Salary Guides - Back Office compensation around the world (2019)

Savvy Investor provides a roundup of the best salary surveys covering back and middle office roles in the investment management industry.

GLOBAL CUSTODY

Custodian and Depositary Banks: An outlook of the industry (Deloitte, 2019)

This article aims to address some key trends, focusing on the regulatory landscape, on processes and technologies and on the future of custody.

FUNDS PROCESSING

Standardization of Funds Processing in Europe (EFAMA, 2018)

This paper by EFAMA (the European Fund and Asset Management Association) is the third update to a report that was first published in 2005 to recommend improvements in the efficiency of processing of fund orders. This latest version includes updates on new and evolving technology and continues to suggest the potential for cost savings to be made.

ALTERNATIVE INVESTING

Reducing the cost and complexity of supporting alternatives (SimCorp, 2019)

Asset owners and asset managers face challenges to cost-effectively support their allocations to alternative investments. This paper from SimCorp examines the issues faced by operations teams and suggests how these obstacles can be overcome, enabling investors efficiently to scale their investments in alternatives.

CYBER RISKS

Building Cyber Resilience in Asset Management (Investment Association, 2018)

In this 32-page report, The Investment Association and KPMG discuss the threat of cyber attacks and the level of preparedness for such an occurence within the asset management industry.

PRIME BROKERAGE

European hedge fund managers' views on prime broker relationships (Deloitte, 2018)

In this 16-page study, Deloitte presents the results of a survey of European hedge fund managers. The report reveals HF managers' perceptions of their prime broker relationships - discussing the strengths and weaknesses of prime broker services and the factors that they value.

TECHNOLOGY CONSOLIDATION

A Brave New World: The Benefits of System Consolidation (SimCorp, 2019)

Systems consolidation projects are expensive, but can have a transformative effect upon an investment organisation. This white paper is based on a survey of 110 executives working in asset management, mutual funds, pension funds, insurance and bank treasury firms.

SECURITIES LENDING

Explaining the differences in funds' securities lending returns (Vanguard)

This 2016 paper seeks to provide a comprehensive view of how securities lending contributes to fund returns. The report is based upon a large data sample of funds, covering multiple asset classes and over multiple years.

The Institutional Investor Guide to Securities Lending (ISLA, 2019)

Securities lending plays a vital role in global equity markets, being used for settlement and collateral requirements, for providing liquidity to secondary markets and for generating incremental returns for investors. This 23-page paper is a guide for institutional investors, explaining who the users of securities lending are, the benefits and risks, and the associated regulations.

USES OF BLOCKCHAIN

Distributed Ledger Technology – A Consensus on the Buy-Side (Hunt and Mills, 2018)

This 70 page report from the Investment Association presents a variety of views and experiences of distributed ledger technology (DLT) and Blockchain as it applies to asset management firms.

Distributed ledger technology for securities settlement (Bank of England, 2017)

In theory, distributed ledger technology holds out the possibility to reduce costs and increase the efficacy of securities settlement. In this report, the Bank of England authors argue that the potential is high, but that systems are still evolving. Recommendations are suggested for both users and regulators.

Real use cases for Blockchain and DLT in the Asset Management sector (KPMG, 2017)

This 11-page paper by KPMG aims to cut through the hype of blockchain and distributed ledger technology (DLT) to offer real and practical examples of how these technologies work in the asset management space. The authors examine specific areas where blockchain and DLT are disrupting the status quo for asset managers and their value chains.