[ M A R K E T R E V I E W | H F A ] partnerships with FinTechs that are specialists in middle-office technology . Earlier in 2018 , MUFG Investor Services partnered with Point Nine ’ s outsourcing platform , Circle , in order to expand its business process outsourcing ( BPO ) technology . JP Morgan also struck a deal with post-trade technology firm Arcesium at the back end of last year to use its middle- and back-office software , which will support its fund administration platform . These partnerships are often used in combination with their own proprietary technology , in order to process the vast amount of data needed for middle-office outsourcing services . “ With the amount of data JP Morgan handles , we want to optimise the delivery to the client in the most effective and useful way possible . From a data delivery perspective , we are trying to combine all of our hedge fund data with a high-touch service model ,” adds JP Morgan ’ s Kehoe . The expansion of middle-office capabilities , along with the move into the front-office , shows how client mandates will now largely involve a full front-to-back service , with data management at the core . “ All of the major mandates are full front-to-back solution-driven . The client wants to understand everything they can get out of a strategic partnership , and how they can make things more efficient over time , how they can leverage the best technology , and look for the best output ,” adds SS & C ’ s Greaves .
Transparency becomes crucial With data management becoming such a focus for the fund administrator , clients are also expecting a certain level of transparency over the collection and processing of that data . According to alternatives investment research provider , eVestment , this trend has been partly driven by MiFID II , which has influenced clients regularly requesting updates over their data in order to comply with the rules . One potential solution is for fund managers to have greater access and transparency into their own databases held at the administrator . This will allow greater real-time reporting , as well as the ability to give them a more structured data set in a customised format . “ From a client service perspective , it makes absolute sense for them to have better access to their own data in real-time ,” explains Kehoe .
“ In an ever-changing regulatory environment maintaining the additional data requirements , in a scalable and controlled environment , puts a lot of pressure on hedge funds . Accessing their own data to allow them to meet requirements such as Annex IV , Form PF or CPO-PQR while maintaining flexibility of how they use
“ More administrators are becoming involved with OMS in order to get into the front-office .”
JAY PELLER , HEAD OF FUND SERVICES , CITCO
the data in valuable .” Citco has already adopted cloud-based technology by Amazon Web Services ( AWS ) and Google to allow this . “ Nowadays we are taking in massive amounts of data , enriching it , and shooting it back to the client . NAV and financial statements are downstream and are not as time sensitive , but we are now using the cloud to facilitate a lot of our clients ’ new data requests , in addition to exposing all of our systems to clients for real-time data ,” says Peller . The future of fund administration will whole-heartedly be based on the ability to meet the demand for data . Administrators will have to manage the entire flow of data from the front-office to the back , and then be able to provide that level of transparency back to the client . In order to stay competitive in an ever-consolidating world , administrators will have to come up with a plan fast to stay relevant .
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