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Investment funds are facing some significant challenges as we move into 2023

Tough macro headwinds - namely depressed equity markets and volatility in fixed income – are making it increasingly complex for fund managers.
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Tough macro headwinds - namely depressed equity markets and volatility in fixed income – are making it increasingly complex for fund managers. At the same time, the industry is facing rising costs, owing to a combination of 40-year high inflation, downward investor pressure on management and performance fees, and the impact of global regulations.

At an operational level, a number of managers are also struggling. Firms might be sitting on a lot of unstructured data across their business, making it harder to make for them informed investment decisions as data isn’t viewing from a single source or dashboard. Inadequate data management also hampers managers’ ability to meet clients and regulators’ growing reporting demands. More institutional investors, for example,   are demanding real-time and highly detailed data to be delivered to them in an automated fashion, often in a medium that can be accessed through a tablet or smart phone.  

For managers who still rely on tools such as Microsoft Excel, this can lead to inefficiencies and inaccuracies in reporting. If reporting is substandard, then managers might find it challenging to attract funds in what has become a very tough and competitive capital raising environment. Technology is a cornerstone of what investors look for as part of their DDQ’s.

The role of  high-quality service providers will be vital if managers are to navigate these issues, and thrive. So what should managers be looking for from their providers? A systematised approach towards data management is essential. Aggregating data, which has been generated in the front, middle or back office in a centralised location will help asset managers with their decision-making processes -  enabling them to grow and focus on delivering returns. It is here where tools such as Portfolio BI’s EDM, OMS and PMS solutions can prove invaluable.

Similarly, cloud-based technologies have been instrumental in facilitating growth at a lot of businesses, including asset managers. Through Portfolio BI, managers can obtain a global cloud platform, with the choice of utilising either one of Microsoft Azure, Microsoft 365 or Amazon Web Services. Moreover, Portfolio BI can support clients with cloud migration while its DevOps solution enables mangers to obtain efficiencies, when leveraging cloud-based tools.

In addition to these technology solutions, Portfolio BI supports clients through bespoke consultancy work and implementation projects. With its deep rooted expertise, Portfolio BI has proven to be a critical enabler  for many of its fund manager clients by enhancing their operational processes and technology systems.

Regulators have been clear that they understand the role of the service provider in supporting managers is expected to become more important than ever before. Both the SEC and FCA have set out guidance to manager operational resilience and third party relationships, which managers should always consider as part of their onboarding process with vendors.

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