FundForum Has Found New Home in Berlin
OREANDA-NEWS. After many happy years in Monaco, FundForum has found a new home in Berlin, for 2016 at least. While the Mediterranean principality was well suited to hosting an event of international scope, FundForum’s relocation to Germany’s capital brings an opportunity to consider the overlap between domestic and global trends in the investment management industry.
For German asset management firms, there has always been a strong organisational focus on the investment decision, supported by a streamlined sales and marketing function to handle customer interactions. Of course, many firms – in Germany and beyond – have built additional administrative capabilities as a consequence of growing size and complexity. Most have attempted to maintain a light structure wherever possible, not least to maintain the flexibility to adjust to changes in investment opportunities and preferences.
But asset managers, especially German ones, rarely see middle and back office process efficiency as a core competence. Moreover, investment in extra staff and technology to handle new tasks is generally detrimental to returns to customers. As such, asset managers are increasingly looking for support from service providers with the proven capabilities to meet heightened regulatory requirements. In parallel with increased demand, the supply side has also advanced. Major outsourcing service providers have made the necessary technology investments to handle multiple evolving processes at greater volume and speed and lower cost, as well as developing the expertise to adjust these to the evolving requirements of multiple jurisdictions.
To cater for a range of clients effectively, outsourcing service providers must also take account of different priorities by offering multiple options, in terms of the processes outsourced, and the oversight and control provided. That said, we believe a deal announced last year between BNY Mellon and Deutsche Asset Management could provide a blueprint for the asset management industry in Germany, and perhaps further afield too. Under the arrangement, Deutsche has outsourced its real estate and infrastructure fund accounting and parts of its reporting functions to BNY Mellon, with members of Deutsche Asset Management's team transferring to BNY Mellon’s Alternative Investment Services business.
Unlike some outsourcing deals of the past, such new transactions represent a new level of partnership between asset managers and their banking service providers, leveraging the capabilities of both to meet the expectations of regulators and institutional investors. In Germany, we are already seeing demand for similar arrangements, notably from asset managers specialising in the real estate and property space. Like FundForum 2016, this is by no means a purely German phenomenon, but for the moment it certainly has a local flavour.
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