Asset managers are increasingly looking to oursource their front office operations, according to BNP Paribas and London-based consultancy firm Investit.
Outsourcing reduces overall costs and operational risks, and provides diversification in new markets, as managers need to “keep pace” with new regulatory requirements and advances in technology, according to the survey.
Asset managers are at a “cross roads”, according to Philippe Boulenguiez, head of dealing services at BNP Paribas.
“They are looking for revenue streams in new asset classes and geographies, while having to demonstrate best execution and cope with market fragmentation.”
Investit surveyed 31 investment managers including in-house pension managers and global asset management firms.
The survey found that access to technologies and specialist teams were advantages in the managers’ opinions, as were extended dealing hours and market proximity because of outsourcers’ various locations.
Richard Phillipson, principal and director of institutional consulting at Investit, said: “Managers increasingly see outsourcing their dealing function as an economically attractive approach to achieving best execution.”
