| Everybody out: regulatory burden creates boon for outsourcers Managing the regulatory and compliance burden is nothing new for asset managers, but as the pressure to meet ever-more stringent standards grows, so the opportunities open for third parties to take over some of the responsibility.
This week we hear that following the Financial Conduct Authority’s excoriating review of asset managers’ liquidity management frameworks in July, more firms are looking to outsource processes to keep up with the regulator’s expectations.
Patric Foley-Brickley, Managing Director, Apex FundRock UK, tells IAM that since a large number of participants in the FCA’s multi-firm review fell short of the regulator’s expectations on liquidity management, they would need to undertake significant work to come up to scratch.
This, he says has already led to an increase interest from fund managers to appoint third party liquidity management specialists
and adds: "The expectations of the FCA in regard to liquidity management practices are clear, and by choosing the right service provider, AFMs can be confident that they are meeting these expectations in a timely and diligent manner."
Meanwhile, governance, risk, and compliance adviser ACA Group has launched a Best Execution solution, which it says is designed to help investment managers worldwide "address regulatory requirements while reducing cost of ownership".
The new service follows the Securities and Exchange Commission’s introduction of a comprehensive best execution regulatory framework which requires market participants to "establish, maintain, and enforce" written policies and procedures in the regulator’s Best Execution Standard.
ACA says it can help global firms facilitate the exchange of critical data and reduce the cost and time to complete required regulatory reports.
Patrick Conroy, Partner at ACA, says
regulators expect firms to demonstrate that they are "consistently taking all sufficient steps to obtain the best possible results for their clients, including evaluating the execution performance of transactions", and with compliance running into the tens of millions of dollars, it is no wonder businesses are keen to outsource to a third-party specialist that will keep them on the right side of the law.
While business is on the up for outsourcers, the future is looking less bright for venture capitalists. New data from Preqin shows a massive decline for the sector in the second half of 2023. Venture capital deal-making has trended downward for the sixth successive quarter with 4,485 deals completed, while aggregate deal value reached USD63.2 billion. Meanwhile, the number of exits and aggregate exit value are 30.6 per cent and 33.0 per cent lower than their five-year quarterly average, at 419 and USD52.9 billion, respectively, by Q2 2023.
Michael
Patterson, Senior Associate, Research Insights, at Preqin blames more "discerning" investors who are increasingly choosy about where they allocate capital.
And with inflation still persistently high keeping monetary policy tight, this bleak picture for the venture capital is set to persist.
Next week, on the 28th August, the nominations survey will open for the Institutional Asset Manager service provider awards 2023. Be ready to nominate your favourite service providers in the institutional asset manager awards.
For further information on the awards please click here.
Gill Wadsworth, Editor
For live updates please follow us on Twitter and LinkedIn.
|
