Unforeseeable market changes, pressure for growth and evolving regulations have prompted global fund managers to reassess their outsourcing setups in the Asia Pacific region. Michael Li, regional head of SS&C GlobeOp talked to Global Custodian and gave a strategic evaluation on how funds could rebalance their operations and return to a path to growth.
Rebalance operations for growth
When global asset managers evaluate the growth strategy in Asia Pacific, they tend to evaluate their existing partnerships, talent pool and infrastructure setup first. Many of these managers decide to outsource for historical reasons or convenience, resulting in a collection of service providers.
However, based on our observations spanning 36 years, global asset managers tend to underestimate the strategic importance of the proper technology platform in the global service model. The choice of technology platform can make or break their operations. Some funds may initially choose a boutique administrator in the Asia Pacific region due to cost considerations. However, as they strive to scale their operations, they often encounter significant challenges arising from legacy setups that hinder their growth. Thus, fund managers should view technology platforms as a growth enabler instead of a cost center.
Tackling local nuances in the Asia Pacific is also a key challenge when it comes to outsourcing setup. A one-size-fits-all solution is ineffective and we are a firm believer of a tailored and nuanced approach. The key to success is collaborating with a trusted administrator with a unique global operating model, robust on-the-ground presence and a strong track record of success. This provides more resources and support should you need to scale your operations and mitigate regulatory risks.
Address regulatory and operational challenges through technology
Technology plays a pivotal role in addressing the challenges of regulatory reporting. For instance, the recent SEC rule on private funds has had an impact on how managers approach investor relations and produce reports. The timing has become more compressed, while the demand for increased disclosure to global investors has risen. These regulatory changes call for a reevaluation of investor relations strategies and reporting practices.
Further, navigating the regulatory landscape, establishing new fund structures and meeting investor demands require a combination of experience and technology. For instance, many Cayman-based funds are facing more scrutiny due to the tightened regulations, whereas funds in major local hub jurisdictions such as Hong Kong and Singapore are under immense pressure to adapt to the changing regulatory landscape. It’s both an art and a science—our advice is to partner with an experienced global administrator to flatten your learning curve, guide you through the local nuances and reduce your time to market.
Back on a path to growth
Technology plays a vital role in driving growth and managing regulatory requirements and investor needs. With a dedicated team of 300+ maintaining and supporting our technology platforms, you can streamline your fund operations to not only boost your productivity but also your bottom line. From a servicing perspective, we built the entire ecosystem around our Geneva platform, allowing fund managers to have more leeway to anticipate potential reporting needs from both the fund managers and investors.
In the hedge fund space, the straight-through processing enables a faster reconciliation and allows managers to quickly adapt to seize new business opportunities. For private markets, where limited partnership agreements act as legal contracts, the need for flexibility arises. Our proprietary systems allow for customization and address specific needs through side letters. This adaptability enhances our ability to meet unique client demands effectively.
In essence, it’s paramount to evaluate your outsourcing setups by looking at the benefits and interplay of service providers’ global operating models, local knowledge and technology platforms collectively, and to evaluate how they could advance your growth ambitions.
To learn more about how our extensive range of fund administration solutions can take your business to the level, download our “Changing Fund Administrators is Easier Than You Think" whitepaper.
