Outsourcing: The Coming Wave in Investment Management
Abstract
Celent Communications predicts the demand for outsourcing services by US and European investment managers will generate US$30 billion in outsourcing revenues by 2006.
In a new report, Outsourcing—The Coming Wave in Investment Management, Celent examines the transformation of outsourcing services, reviews the factors driving demand, analyzes the competitors and the various outsourcing business models, and considers the factors which will determine success in the marketplace. The report also presents survey findings of leading investment managers’ interest in, and attitudes about, outsourcing.
One key finding of the report is that 40% of investment managers with greater than US$1 billion in assets are considering outsourcing back, middle, and more limited front-office operations by 2004. However, they will grant business only to stable, well-heeled providers whom they trust.
According to Pamela Brewster, analyst at Celent, "With the market downturn and intensified competition for assets, investment managers are re-evaluating their core competencies and looking to gain operational efficiencies. Outsourcing promises to deliver three significant benefits: lower overhead costs, increased productivity, and risk reduction."