The evolving market cycle has put pressure on managers to increase margins on investments for their clients. This – coupled with increased competition, innovation and regulatory changes – has forced many to re-examine their business process and outsource non-core activities to enable a stronger focus on the core competencies that help them maximize returns.
There are a number of other reasons outside of alpha generation that have led to the growing demand for outsourcing in the middle office, such as lack of expertise, cost management, shortage of staff and insufficient budget. With middle-office outsourcing providers, business operations like trade processing, OTC confirmation and settlement, end-of-day P&L calculation, asset life cycle management, FX hedging, cash flow projection, credit facilities, and pricing can be handled with ease. Additional benefits of working with a middle-office outsourcing provider include:
- Strategic competency
- Seamless adaptation to current market trends
- Trusted business advisor
- Further market expansion
- Cost management
- Full transparency
- Complete audit trail
- Timely monitoring
- Front and back-office harmony
- Trade matching
Middle-office outsourcing providers no longer work as conventional partners, rather they extend their efforts to deliver alternative thinking and create processes that help investment managers achieve their key objectives. No matter their size, investment managers that lack human capital, budget, technology and other resources can seek assistance from these providers to expand their scale of business, drive efficiency and increase transparency.