Why Do Hedge Funds Fail?

Why do hedge funds fail? Assets managed under hedge funds have hit an all-time high, and on average, close to one thousand new funds are created every year. Despite promising prospects, the average hedge fund company lasts between 5 and 7 years, and for the first time since 2008, the number of firm closures surpassed one thousand in 2017. Starting a hedge fund can be amazingly lucrative, but you must prepare for headwinds, as the way you handle these challenges…

Six Sigma Benefits for Hedge Funds and Asset Managers

Poor operational performance is a drag on investment firms, both in terms of client satisfaction and the bottom line. Back-office reconciliation reporting errors hurt your credibility, and incompetence is an excuse for the client to move their wealth and assets to rival money managers. Operations personnel may not be in direct contact with the client, but you and your middle- and back-office reporting analysts play an integral role in the client experience by delivering quality and reliable reports….

Italian Political Crisis: What It Means for Investment Managers

  Will the turmoil in Italy, the euro area’s third-largest economy, fracture the eurozone and ultimately spell the end of the single currency? At this stage, almost anything seems possible. Yet while the longer-term results – and the implications for the investment management community – remain to be seen, for me, two immediate lessons stand out: Political risk and the volatility it produces remain considerable and are hard to predict. Profiting from them – and…

What Do Back-Office Outsourcing Companies and Plumbers Have in Common?

Financial services back-office outsourcing companies and plumbers have more in common than you think. While a plumber fixes leaky pipes and broken toilets, a middle- and back-office outsourcing specialist does an equivalent line of work for investment management operations. These specialists will provide daily reconciliation reporting, IT support, and custom services to ensure operational continuity for hedge funds, family offices, wealth and asset managers. Who on earth would question the importance of good plumbing? We need our sinks, pipes, and toilets to…

Investment Management Operational Risk: Outsourcing a Solution to Weather Financial Storms

Investment management operational risk is increasing, despite global markets being in their best shape since the 2008 global financial crisis. Although the world economy has otherwise improved, we are seeing signs of strain. The question is, are these just blips in an otherwise upward trajectory, or are these troublesome signs of a prolonged downward trend? The last two months have been dominated by the off- and on-again nature of a trade war between the United States…

Why Investment Management COOs Should Think Like CFOs

Investment management COOs must increasingly have a financially-oriented mindset in a climate filled with uncertainty. As operations head, your success is not only measured by improving efficiency and middle- and back-office performance. Reducing operational costs is also your duty. Simply focusing on your own department is not enough. Threats to cash flows put pressure on advisory firms’ bottom lines, and as a result, money managers are scrambling to lower costs. One of the things on the…

SFTR Reporting: New EU Securities Finance Regulation for Investment Managers

That’s right – another far-reaching, operationally-challenging European Union regulatory initiative is coming down the pike and is expected to go live in mid-2019. The Securities Finance Transaction Regulation (SFTR) will introduce new reporting obligations on securities lending, repo, sell/buy-back and margin lending transactions. The goal is familiar: to enhance transparency and limit risk, in this case from non-bank alternative credit provision. As with so many post-financial crisis regulations, the SFTR will have a broad reach,…

GDPR Benefits for Financial Services: 3 Reasons to Comply

General Data Protection Regulations (GDPR) benefits for financial services firms do exist. Despite the “rules, rules, rules” nature of compliance and operations, not to mention the financial consequences for failure to comply with GDPR, today’s newly passed EU regulations serve as a reminder for investment managers both inside and outside the EU that it pays to play by the rules. Some advisories that are legally obligated to comply will drag their feet, while others not…

5 Signs You Need a New Back-Office Operations Outsourcing Provider

If you feel frustrated, angry or disappointed with the service you’re getting, then it’s time to think about a new middle- and back-office operations outsourcing provider. Many investment managers’ profit margins are getting squeezed, and outsourcing is a good way to reduce operational costs and increase profit margins. But with so many things going wrong, you’re not enjoying the benefits. The cost savings and efficiency gains are real, but now it’s a matter of finding and…

8 Questions to Ask Middle- and Back-Office Operations Outsourcing Companies

When planning for a call with investment management middle- and back-office operations outsourcing companies, knowing what to ask will make your meeting more productive. While some information about the outsourcing specialists can be found online, other details are not available, unless you schedule a call or meeting. Even if you’re getting an answer to a question you may have already researched, talking directly to a specialist adds a human component that is needed when planning to outsource. What You Should Ask Middle- and Back-Office…

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