Over the past three or four years, there has been a shift from acquisitions to lending among real assets investors. Commercial real estate prices increased starting in 2008 when acquisitions of both residential and commercial real estate were quite high. The shift from acquisitions to lending to real asset owners/investors in need of capital is fast becoming a new trend. Lenders are able to earn on the interest of the loans rather than commit to an asset—particularly commercial which has seen a drop in value. That drop has been most dramatic during the pandemic, although the decline was beginning prior to March 2020. Investors who may have diminishing values in their real estate portfolio can turn to private capital to provide needed liquidity—particularly during the recent volatility in the market.
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As regulators around the globe beef up their enforcement of best execution rules, wealth managers need to pay attention now more than ever. When trading assets, brokers are required to seek the best execution reasonably available to fill their customers' orders. Similarly, advisors need to prove that their client’s total costs (or proceeds) in each transaction are the most favorable under the prevailing market conditions. For wealth managers, meeting best execution mandates means having a systematic approach in place to report on these fiduciary responsibilities.
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In this current environment of the COVID-19 pandemic, Family Offices that do not utilize outsource or co-source services have quickly determined they have a significant gap in their operations and reporting environment. Many Family Offices have realized their data is weeks or months stale. Readily available information is hard to pull together due to manual processes across multiple systems. Processes that have been maintained over the years due to legacy technology and workflows have been inherited by their current teams, with replication across teams proving to be complicated.
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Is your firm in scope for UMR? SS&C’s whitepaper, OTC Derivatives Workflow for Un-cleared Margin Rules in the EU and US, provides a simple flow chart to help you determine whether your firm is in scope, and for which phase.
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As investment management firms explore ways to lower costs and improve their operational efficiency, they continue to focus on opportunities to streamline the whole front-to-back office process. This presents a tremendous opportunity to transform the business so it is positioned to grow and have the agility to meet opportunities for years to come. While few disagree that an end state of having everything on one technology platform would achieve this outcome, the challenge is getting there.
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Interest in investor SWIFT (Society for Worldwide Interbank Financial Telecommunications) processing is typically inclined towards mutual funds. The alternative assets and hedge fund space is often seen as more complex and harder to support with automated services and messaging templates are usually not standardized when dealing with transfer agents. In recent years, an increase in institutional investment funds and large custodian banks entering the hedge market has slowly nudged the industry towards realizing the benefit of standardization of SWIFT messaging, as it can be key to opening up distribution in newer global markets.
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Prior to the outbreak of COVID-19, it was undeniable that the world was going through a technological revolution. The impact of this disease has caused an abrupt acceleration in the need to operate in a paperless, contactless world. At SS&C, we have found success in focusing on four main dimensions—Policy, Process, Platform and People as highlighted in a recent video produced by AIMA.
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The global lockdowns and the associated economic downturn have triggered the innate human nesting instinct. Thoughts turn inwards as preparations are made to handle the current situation and prepare for the future. Across the globe, rates of household saving have soared and people are investing in pursuits that will improve their ability to ride out bumps in the road ahead.
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