The Asset Owners Awaken: A Sleeping Giant Demands a Technology Upgrade

Celent has released a new report titled The Asset Owners Awaken. The report was written by Jay Wolstenholme, senior analyst in Celent’s Securities & Investments practice.

Current demands on institutional asset owners have never been greater, funding levels must be met; portfolio performance, risk, and analytics reports must be presented to investment committees, the board, and clients; and all regulatory requirements must be delivered accurately and timely. On an institutional level, asset owners need to have a full oversight of the aggregate of their investments in an updated electronic digital format. Manual reports are no longer sufficient.

The low-rate economic environment has forced asset owners to extend out on the risk curve. Many asset owners utilize external asset managers for specialized asset allocations in alternative investments. Up and down the AuM level of asset owners, there is a wide range of internal asset management and external asset management.

“Whether an institutional asset owner is solely using external asset managers or there is a mix, the owner needs to aggregate all portfolios, not only for internal analysis and risk assessment, but also for reporting to regulatory bodies and the ever-increasing number of interested parties that need accurate information,” says Wolstenholme.

Prudent fiduciary oversight has always been the topmost concern for asset owners, but as the investment landscape has become much more complex, legacy workflow methods have become inadequate. The combination of internal investment committee mandates, increased regulatory requirements, internal analysis, and increased demand for outward-facing digital reporting are all reasons that asset owners are revaluating and perhaps reengineering their toolsets.