Fund managers are set to make greater use of third-party service providers to cope with an increasingly complex regulatory environment, suggests research.
A study commissioned by fund services provider Carne Group found that more than three-quarters (79%) expect to increase their use of outsourcing over the next 12 months.
Almost all of the respondents (99%) expect it to become harder to navigate the regulatory landscape over the next two years and will turn to outsourcing as a result.
A similar number (91%) expect to make greater use of third-party providers for their fund administration with 41% expected to “dramatically increase” their use of third-party administrators.
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The report cites three factors for this trend – difficulty in recruiting the right staff; growing regulatory requirements and operating in more jurisdictions.
Outsourcing is also expected to increase for the management of funds and not just their administration, as cited by 79% of respondents. The reasons cited for the trend are the need to launch different products, speed to market and the need to demonstrate stronger fiduciary management.
“Many asset managers are struggling with the impact of the continually increasing regulatory burden, the costs to their businesses and impact on investor returns,” said John Donohoe, group CEO at Carne Group.
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“To address this, they are making greater use of third-party specialist providers, enabling them to speed up their time to revenue and to focus on what matters most… product innovation, delivering investment performance and raising assets.”
The survey canvassed 201 senior executives at fund managers in 10 different countries.
