In the post Covid world, middle office efficiencies and outsourcing are top priorities for global asset managers, according to Brown Brothers Harriman & Co’s (BBH) inaugural C-Suite Asset Manager Survey.
The report, which canvassed over 50 senior executives, responsible for over $18 trn in assets under management (AUM), focused on the unprecedented challenges this year, and how they are preparing for the future.
On the IT side, around 57% said they were looking to enhance their data abilities with 38% identifying the middle office as an area to drive efficiency.
Moreover, many are considering outsourcing operational functions. In fact, 30% of global asset managers are more likely to look at this option than a year ago.
On other issues, a combination of the global pandemic, dramatic volatility, and a contentious US election has propelled the economy for 61% to the top of the chart of main concerns. However, a closer reading reveals that 70% of managers with less than $50 bn AUM said it was their chief worry while larger institutions—those with more than $500 bn AUM—were more focused on staff productivity and cybersecurity.
Not surprisingly, the survey also found that over two thirds or 77% are changing the way they allocate capital as a result of Covid-19 while the majority believe that 50% of their employees will be able to return to the office in the second quarter of 2021.
The pandemic has also had an impact on fees escalating an already intense battle. Slightly over half are planning to reduce the expense ratios or fees in the next 12 months to respond to competitive pressures.
They are also looking to boost performance by adopting new, higher return strategies as well as optimising securities lending, FX, and operational improvements.
“2020 has disrupted our industry, and every industry,” said Chris Remondi, BBH partner and global head of relationship management and capital markets. “With this survey, we embarked on a mission: interview asset management leaders — CEOs, COOs, and senior executives — to see how managers are coping and what is the future of our industry. The results of our conversations demonstrate both the challenges and the resilience of our industry.