As the world’s largest fund administrator, SS&C is in a unique position to identify, respond to, and influence trends shaping the fund industry. Over the last few years, we’ve been right in the middle of two interrelated trends: increasingly rigorous investor due diligence into fund managers’ operational performance, and the increasing interest on the part of fund managers in technology and operations outsourcing.
Investment performance is still a fund’s calling card, but operational performance can be a big differentiator and tip the scales in the competition for capital. Investors want to be confident the managers they select are taking measures to mitigate operational risks and cyberthreats, and that they are able to provide transparency into fund holdings, expenses, and returns.
On the fund side, there are many factors driving the outsourcing trend. Managers are seeing their operational costs escalating every year and want greater predictability. In the wake of the pandemic, they are also experiencing staff turnover and an acute shortage of IT and operational talent. Meanwhile, technology keeps advancing ever more rapidly, and it’s a challenge to keep up. Outsourcing is seen as a way to alleviate these burdens and allow fund firms to focus on their core business activity of generating optimal returns for investors. As many fund firms seek to diversify among different asset classes or geographies, outsourcing gives them greater flexibility to scale their operations and pivot to new opportunities.
Here is where the interests of the fund manager and investors intersect: outsourcing is a way to strengthen operational performance and satisfy more demanding due diligence requirements—assuming the fund manager selects a technology and services provider with a solid track record and the financial resources to continually reinvest in its operational infrastructure.
As both an administrator and an outsourcing partner for alternative funds worldwide, we recognize our responsibility to ensure our clients can meet their clients’ expectations. These include the timely calculation, validation and delivery of NAV, thorough and transparent reporting, accurate fee calculations, and accounting for investor P&L allocations with impeccable precision. Fund managers also expect us to maintain a strong compliance posture and meet the regulatory requirements of every jurisdiction in which they operate—all while optimizing our own internal efficiencies to help hold the line on expenses.
In effect, we have a fiduciary duty to our clients and to their clients to continually invest in new technologies and operational process improvement. We always have to be at the cutting edge—not just for the sake of innovation, but to ensure we are delivering the best possible value to funds and investors. Fortunately, SS&C has a long track record of innovation in investment technology. Moreover, we are unique among fund administrators in that we develop, own and support the technology that underpins our services.
GoCentral, our newly launched, intelligent fund administration platform, is the latest example of this philosophy in action. It is the result of extensive research and process reengineering to figure out where we could eliminate steps and drive efficiency. It was also an opportunity to leverage the latest, most advanced technologies—AI, machine learning, analytics and natural language processing—from the inception of a solution, rather than trying to integrate them into a legacy platform. The end result is a powerful solution that automates, streamlines and accelerates all processes leading up to the calculation of an accurate NAV, and enables a quicker launch into all the downstream activity that depends on those calculations.
It's not an exaggeration to say we have modernized fund administration and set a new standard with GoCentral. But for all the reasons cited earlier, we can’t stop there. We will continue to invest in technologies and expertise that we believe will benefit our clients and their clients—and to ensure that our clients get straight A+ on their ODD report cards. Learn more about GoCentral .
Written by Jason Costa