InvestOps Recap: The Misconception Around Global Operating Models

Eagle’s Liz Blake, speaking on a panel at the InvestOps conference, highlights why all asset managers should be thinking about a global operating model regardless of where their business resides

Liz Blake, Global Head of Eagle Managed ServicesSM


As part of a panel at the recent InvestOps USA Conference the moderator opened the discussion asking how buy-side firms are navigating globalization’s many obstacles. While added regulatory demands and competitive pressures have certainly made these challenges more acute, the opportunities available through adopting a global operating model should not be overshadowed. In fact, even for domestic firms—who may harbor no designs to open overseas locations—the ability to extend the business day through “follow the sun” (FTS) workflows is becoming a necessity to accommodate the new and pressing demands being placed on operations teams.

This was a theme I discussed at the conference, which also featured panelists in senior operating roles at Invesco, Manulife Asset Management, and Putnam Investments. The larger point is that given the complexities and challenges that face asset managers of all sizes today, not having a team in place working around the clock to instill a true data foundation can create a competitive disadvantage in the form of back-office bottlenecks and the erosion of trust across the enterprise. If portfolio managers don’t have conviction in the data or if accounting and reporting teams spend their days trying to resolve data errors, the impact will extend far beyond lost efficiencies.

The challenges facing asset managers have only mounted in recent years, whether they’re contending with multiple regulatory regimes and market standards or just one. The rotation into passive funds has put considerable pressure on fees. And in a low-return market, active managers have gravitated toward ever more complex, data-intensive strategies while ramping up risk to create differentiation. The rapid advance of technology, ostensibly offering relief through added capabilities and streamlined operations, just as often creates new issues by adding to the organization’s swelling technology debt. And as new solutions are shoehorned into a sprawling and discordant technology stack, the outcomes are often at odds with the intent.

From a COO’s perspective, the ceaseless strain these prevailing demands now exert on the middle-office has made it that much more difficult to attract and retain capable talent. (This is particularly the case in an economy currently at “full employment” levels.) The impact of this is felt by the entire organization.

Consider what might be a typical disruption to an overnight cycle. For those operating in one time zone, the interruption to daily workflows will have a cascading effect across the balance of the workday. Contrast this with organizations that have adopted a global FTS model and have teams in place to address issues as they arise. Data is available—with data-quality flags—before the opening bell. As a result, portfolio managers, sales teams, and client-reporting roles are armed with the information they need to perform with confidence or respond quickly to issues that arise throughout the workday. The middle office, meanwhile, becomes empowered to pursue proactive, value-added functions.

In an era defined by business transformation and against a backdrop of growing data volumes, asset managers are tapping into managed services solutions to create a scalable data function that supports a FTS model and supplements existing teams. And this budding interest in managed services is evident across both global and domestic asset managers. The benefit is a cost-effective way to facilitate 24-hour processing, with increased data checks and controls as well as a deeper use of either existing or new software capabilities. By leveraging economies of scale and the deep expertise of trusted vendors, organizations are able to solve other issues that arise.

On the panel, for instance, one of the participants highlighted the challenges of integrating technology into a complex operating environment. A core discipline of managed services providers is to understand how new innovations can fit within existing software solutions. At Eagle, we’re currently integrating robotics into certain processes and working on different ways to continually roll out innovative capabilities into an existing framework.

Having spent several years in senior operating roles within financial institutions, I have experienced and can recognize the steep opportunity cost of trying to test or implement new technologies without a clear understanding of how they will improve or augment existing workflows. But investment firms today are tasked with keeping pace while navigating a dynamic and evolving technology landscape.

Perhaps the biggest takeaway from the panel was, as one participant cited, the need to define what globalization means for your specific organization. And this is true even for those firms who don’t consider themselves to be global in scope. The need to create a robust data foundation—one that operates on a 24-hour cycle to accommodate and distill the volume, variety and velocity of information today—is dictating that all organizations reconsider how they can take a global approach to their operations.

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