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Alternative Market Briefing

Only strong, adaptable and efficient buy side and asset managers will evolve and survive

Monday, September 12, 2016

Komfie Manalo, Opalesque Asia:

Only the adaptable, strong and efficient buy side and asset managers will evolve and survive, said Celent in its new report "The Little Big Story of Asset Management: Factories and Boutiques Create the Need for IT Upgrades" written by Jay Wolstenholme, senior analyst in Celent’s Securities and Investments practice.

Celent said that macroeconomic factors continue to influence the buy side and asset managers. Low/negative interest rate environment, high-cost operating environment, and increased operational demand from clients and regulators are all exogenous factors forcing the buy side business model to evolve.

"Within the buy side, significant transformation is afoot. The multitude of operational and technical sourcing options readily support the internalization and diverse asset allocations client are demanding up and down the AUM ladder," commented Wolstenholme.

He said that this has fostered the factory/ boutique industry paradigm on the buy side. The factory/ boutique paradigm applies both to the investment side of the business and the vendor side.

Economies of scale allow for lower-cost asset management technology

The report added that the large investment managers grow larger offering across the board investment products, expanding internationally, and expanding into the complete AUM levels of wealth management. Fees can be lowered and services made more efficient d......................

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