Asset managers are very optimistic about revenue and asset growth in 2011, but increasing use of alternative securities and regulatory demands will strain their back office operations, SimCorp found in a recent survey of 49 executives.
“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, managing director of SimCorp N.A.
“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,” Kubersky said. “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.”
The survey found that 90% expect their revenue to increase in 2011, and 100% expect AUM to rise in 2011, with 45% expecting growth of more than 10%.
Nonetheless, 51% of asset managers are still relying on manual processes, with 20% reporting a high degree of manual processes in daily operations. A majority also said it would take more than three months to bring a new product to market, and 38% said their current IT infrastructure is insufficient to support future growth ambitions of their organization.
Further, 80% expect new regulatory and legislative requirements will have a moderate to significant impact on their business in the year ahead.