Most asset manager expect revenue and assets under management to increase in the next 12 months, but concerns, surrounding regulatory changes and IT operations, could hamper overall growth.
According to a survey by SimCorp that was released Monday, asset managers are optimistic about growth in 2011, with 90% expecting an increase in annual revenue. In addition to positive revenue growth projections, 100% of all respondents expected assets under management to growth, with 45% expecting growth of over 10%.
The survey also found that while growth is a priority, most asset managers still are rely on manual processes. Over 51% of asset managers indicated a moderate (31%) or high (20%) degree of manual processes in daily operations.
Respondents also indicated that with the existing investment management systems they have in place, most would take over three months to offer a new product to the market, with 26% of asset managers saying it would take over six months.
Nearly all asset managers felt that increases in regulatory and legislative requirements will affect their organization’s ability to innovate and conduct business. Over 80% of respondents felt that regulatory requirements would have a moderate to significant impact on their business.
Even against this backdrop, over half still have systems that only allow for a moderate to no degree of automation for new reporting requirements such as increased transparency in complex fund structures, regulatory reporting and client reporting.
Many asset managers indicated a lack of growth-readiness – 38% of asset managers felt that their current IT infrastructure was either moderately or had little capability of supporting the future growth ambitions of their organization.
The benchmark survey is based on 49 interviews conducted from April to July 2010 with asset manager globally.
“The findings of this survey echo what we’ve been hearing in the industry about high expectations for growth in the year ahead,” said David Kubersky, the managing director of SimCorp North America. “The survey revealed that many asset managers are concerned about how the growth of complex new investment strategies and expansion into new asset classes and markets is putting stress on existing front-, middle-, and back-office systems. More than ever, we’re seeing a growing need in the industry for enterprise-wide solutions that enable asset managers to quickly adjust to changing strategies and scale up as revenues and AUM continue to grow.”