Thirty-two percent of fund managers are planning to outsource back-office functions over the next 12 months, new research from fund solutions provider KNEIP reveals.
This figure has almost doubled since last year, when just 18% of fund managers planned to outsource these activities. All figures are based on the results of a recent survey of KNEIP clients, which gathered the results of more than 130 fund companies worldwide.
Of the functions identified as most likely to be outsourced, those relating to UCITS regulation and the Key Investor Information Document (KIID) were amongst the most prominent. Approximately 17% of the respondents who noted they would be contracting out back office functions said that they intend to use external providers for their KIID production. Additionally, 22% and 16% percent, respectively, revealed that they would be outsourcing the dissemination and regulatory filing of their KIIDs.
Commenting on the findings, Mario Mantrisi, chief strategy and research Officer at KNEIP, said: While the reporting requirements of regulations such as UCITS IV and V are helping to ensure greater transparency and build investor confidence in the industry, they are also taking up a large amount of fund managers time, diverting them away from core business activities. It is therefore unsurprising that many asset managers intend to contract out their back office functions this year.
Survey participants were also asked what difficulties they anticipated with their KIIDs over the next six months. 53% of fund managers identified keeping their KIIDs up-to-date as the greatest challenge. A further 21% stated that filing with regulators is their main area of concern.
Under UCITS IV, all fund managers must revise their KIIDs following any material changes to the underlying fund, including changes to the investment policy, fund objectives, fund rules and articles of incorporation. The revised KIID must then be filed to the regulators in each country in which the fund is distributed. KNEIP and CETRELSecurities have partnered to provide a secure filing solution for the investment fund industry, to open the marketplace and ease the burden to managers, said Mario.
(JDC)