Investment management firms must maximise technology if they
are to add value to their businesses, SEI has warned.
In its white paper on buy-side infrastructure, it
characterises the current period as transformative, dominated
by the conflicting trends of returning economic growth and
uncertainty, and suggests outsourcing can help asset managers
It says outsourcing creates operational efficiencies that
allow firms to focus on adding proprietary value.
"While assets under management, investor demands, and
regulatory requirements are all still growing, overarching
uncertainty has discouraged firms from similarly expanding
their resource allocations," said Jim Warren, head of
solutions for SEI’s investment managers service
The paper, based on interviews with executives of investment
management firms, covers topics including current buy-side
technology initiatives, driving forces behind business and
budgets, and the changing attitudes towards buy versus build.
SEI stated that the resulting budgetary immobility made the
efficiency of technology initiatives ever more important in
achieving growth and that the current environment supports
the trend toward outsourcing back- and middle-office
functions to create that efficiency.
"It’s no longer a decision of 'buy versus
build’ for investment managers,
it’s become 'partner or perish’"
Executives interviewed also identified reporting and data
management as the most desired technology initiatives. They
believed that having clean and consistent data throughout the
pre- and post-trade life cycle would offer advantages over
Despite a large selection of available service provider
solutions to choose from, many executives admitted to
struggling with the trade-offs between longstanding or
emerging technology, best-of-breed or integrated solutions,
and which providers would potentially be the best long-term
"Selecting the right service provider can be a drawn-out
experience, and it’s important to choose a
provider that clearly adds value, one you consider a true
partner," said Ross Ellis, vice president of the knowledge
partnership for SEI’s investment manager