As more hedge funds are outsourcing more of their operations across the back, middle and front offices, some regional preferences and considerations are emerging. We recently conducted a survey in association with Hedgeweek, where we asked 80 hedge funds across North America, Europe, Asia-Pacific and the rest of the world about their current outsourcing arrangement and future plans. While there were common themes—when asked about plans to increase outsourcing, the different regions responded with comparable rates—there were a couple of areas where Asia-Pacific responses stood out.
Technology is an important factor when choosing an outsourcing provider, and even more so in Asia-Pacific. When asked about their top priority between a provider’s reputation, technology and culture, Asia-Pacific cited technology at a much higher rate than North America or Europe—42% among Asia-Pacific funds, compared to 15% for the other regions.
Asia-Pacific funds also reported being more open to increasing outsourcing, as well as reporting the largest proportion of middle-office outsourcing already in place. While the other regions reported plans to increase outsourcing at 26% (North America) and 31% (Europe), 50% of Asia-Pacific respondents reported plans or openness to expanding their outsourcing.
The complete report of the survey details these regional differences, as well as the types of functions most likely to be outsourced, the drivers behind the middle-office outsourcing trend, and the concerns that some managers still have about outsourcing specific areas of the business. Trade allocation was the most frequently cited function that respondents said they would “never” outsource.