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Mastering Efficiency: Elevating Operations with Middle Office Outsourcing

Efficiency is the key to staying ahead of the curve for buy-side firms. While they do not typically get the glory, middle office operations are pivotal for maintaining smooth operations and full regulatory compliance. Middle office operations typically include security and reference data management, deal data monitoring, trade operations and settlements, and daily reconciliation of cash and positions with fund administrators and custodians.

Ensuring an efficient middle office, however, requires significant investments in human resources and advanced technology. In addition, firms must constantly seek out new talent, cultivate new expertise, and upgrade systems whenever the front office needs to support new products and investment strategies.

This is where middle office outsourcing can help. With access to a dedicated middle office team and specialized expertise, reliable outsourcing services give asset managers a way to streamline operations, reduce costs, and enhance middle office efficiency without the same continuous investments required to maintain these capabilities in house.

Not all outsourcing options are the same, however. Look for a provider that offers expert support for all of the following activities.

Deal Lifecycle Management

The middle office services team you choose should provide comprehensive support throughout the deal lifecycle, ensuring seamless progress from initiation to closure. IVP Middle Office Services, for example, provides a meticulous activity tracker that gives fund managers insights into each stage of the deal lifecycle, including:

  • Identification: Tracking deal specifics such as name, country, and asset seller
  • Sourcing: Analysis of customer profiles, sectors, and valuation metrics
  • Deal pursuit: Organization of asset managers and critical dates
  • Due diligence: Handling legal, tax, and accounting

Trade Support

Middle office outsourcing should of course include seamless trade support, a core capability of an efficient middle office. Look for a team that is accustomed to handling pre-trade bookings, trade executions, and post-trade compliance. The IVP Middle Office Services team routinely provides all of these, including trade capture, booking, amend/correct, allocation, and settlement, as well as FX hedges and roll, and position transfers. In addition, the IVP team can ensure smooth integration with internal systems for trade bookings, allocations, and compliance checks, lightening the technology burden for the asset manager.

Expert Securities Management

It is important to choose a middle office outsourcing provider with deep expertise in financial markets as well as the underlying systems use to manage critical workflows. Only providers with specialized knowledge will be able to attain the level of efficiency asset managers require given the diversity and complexity of investment strategies. With a deep understanding of credit agreements and closing memos, the IVP Middle Office Services team can create and update securities, track covenants, and manage amortization schedules. Integration with internal systems ensures accurate trade bookings and synchronization with downstream applications.

Centralized Data and Reconciliation

Data silos are a well-known source of inconsistency, so it is important to select an outsourcing provider that can handle centralized data and trade reconciliation. IVP Middle Office Services offers centralized deal data that is seamlessly linked to custodian accounting systems. This approach ensures smooth transmission and management of trade and position data, and allows tight integration with leading financial applications for up-to-date security information.

Streamlined Cash Management

More buy-side firms are pursuing alpha through more precise management of unencumbered cash, but cash management can be complex. The ideal middle office outsourcing provider should be able to help funds manage cash in order to meet operational needs and maximize returns. The IVP Middle Office Services team handles a wide variety of cash management functions with precision and efficiency, from reviewing notices from counterparties to managing funding activities, with an overall goal of ensuring seamless cash flow.

Start the Journey to Middle Office Efficiency

Asset managers partner with IVP to outsource middle office operations and gain several strategic advantages. These include the ability to support new products and strategies much sooner, instant access to industry best practices, and a talent pool that does not need to be continuously hired, trained, and retained. By leveraging the expertise and technology integration capabilities of IVP Middle Office Services, asset managers can optimize operations, reduce costs, and focus on core investment and reporting activities.

Learn more about IVP Middle Office Services right now or contact us to speak with an IVP expert in middle office outsourcing.

Middle Office Services

Outsource trade lifecycle management, OTC confirmation and settlement, corporate actions processing, end-of-day P&L calculation, and asset lifecycle management.

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