2019 Buy-Side Trends

2019 Buy-Side Trends
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The latest announcement from Indus Valley Partners on the trends they’re seeing for the buy-side community in 2019. Specifically, IVP believes:

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  • Hyper outsourcing will become the new norm as funds look to cut costs and reduce overall headcount
  • Data management will be seen as a critical competency for asset managers in order to effectively consume, curate, govern and catalog datasets generated by outsourcing providers
  • There will be a rise of the “digital-first” outsourcing provider as disruption continues in the managed services market caused by advancements in technology

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New York, NY – December 19, 2018 – Indus Valley Partners, a provider of technology solutions to the buy side, has announced its 2019 trend outlook for the asset management community. With a growing demand for scalability and transparency throughout the front, middle and back office of funds, IVP continues to adapt to client needs by leveraging the latest advancements in technology and expertise necessary to enable a manager’s full devotion to the generation and retention of alpha.

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Taking a look back at 2018, the desire for funds to possess a defining competitive advantage took the spotlight as artificial intelligence and machine learning-driven technology began to fully emerge and showcase its power to allow for more efficient fund processes. However, with this desire comes the need for funds to shift to a more unified model to empower a seamless transition into a world where mundane functions no longer exist. As we look ahead, the following trends will begin to take shape as outsourcing various functions-as-a-service becomes a core aspect of a fund’s infrastructure.

Hyper Outsourcing Becomes the "Norm"

The need for funds to stick to one or two providers is now an expired ideology with the adoption of hyper outsourcing, which is the strategic and tactical use of multiple service providers (6-10+) enabled by digitalization across the value chain. This model allows for targeted outsourcing of core functions including operations, data, treasury, compliance, risk, IT and accounting as managers find that the pressures of cost, headcount and data control have recently intensified. If funds are not leveraging outsourcing, they will find themselves at a competitive disadvantage to their peers.

Data Management is a Critical Competency for Asset Managers Now

As hyper outsourcing models become the new norm, the ability to consume, curate, govern and catalog the datasets generated by outsourcing providers will become critical. Funds are now also experimenting with alternative datasets being brought into these data layers to enable additional front office insight codification while leveraging data science capabilities. Managers who implement this model will be able to create near real-time views/dashboards for their front, middle and back office teams. With this, managers can leverage the cost reduction that outsourcing offers to better manage their business on a day-to-day basis, allowing for more superior information access at their fingertips.

Rise of the "Digital-First" Outsourcing Provider

There is feverish activity in the Managed Services market due to disruption caused by intense digitalization over the last several years as new technologies such as machine learning, AI, NLP and RPA are establishing footholds in the asset management world. The managed services model of yesteryears is now under threat by a new, more efficient type of "digital-first" managed services provider. The "digital-first" provider does not price services by headcount since it leverages technology to automate manual processes, AI/ML to drive efficiencies in decision making and supplies full transparency via system access to clients.

IVP entered the managed services space by offering "digital-first" principles and has since been driving efficiencies across reconciliation, treasury, data management, regulation reporting and trade processing functions via IVP platforms to create the only 100% transparent managed services model in our industry that is equipped with an “audit anytime” capability.

“2018 has been a crucial year for our industry as it seems that we are now at a stage where our world is cycling through new technological advancements on a routine basis,” said Gurvinder Singh, CEO of Indus Valley Partners. “Those who continue to adapt to change and stay abreast of the latest trends impacting asset managers will not only find themselves in a better position to allow for a continued focus on alpha generation by leveraging some of the latest technologies out there, but will double their edge while continuing to reduce operating costs measurably in areas that matter most.”

About Indus Valley Partners

Founded in 2000, Indus Valley Partners has more than 135 global asset managers and private equity funds among its client base. $1.5 trillion of global hedge fund AUM is managed using IVP technology. Specializing in portfolio management technology for alternative asset managers, IVP provides flexible and modular solutions that can be tailored to the specific requirements of any portfolio or fund. IVP employs 500+ developers, associates and analysts servicing clients globally from offices in New York, San Francisco, Salt Lake City, London, New Delhi, and Mumbai. Learn more about IVP at www.ivp.in.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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