Co-Sourcing: A Fund Advantage

Fund managers are constantly looking for methods to improve performance and streamline their operations in the ever-changing field of investment management. Fund administration co-sourcing has become a new operational strategy as the complexity of fund administration increases due to growing regulatory requirements, technology breakthroughs, and increased LP expectations.

Co-sourcing fund administration is a hybrid approach that blends in-house resources with outside service providers’ knowledge. With this technique, fund managers can use specialized knowledge and cutting-edge technology without completely outsourcing, maintaining control over key operations. Managers who want to improve company operations while keeping flexibility and control over some internal procedures will find co-sourcing very appealing.

Why Co-Sourcing?

Co-sourcing fits nicely with the changing needs of investment management for many fund managers. It provides a customized solution that can expand the company by striking a balance between retaining control over internal systems and having access to experts.

Fund managers can use the co-sourcing approach to maintain control over their data and procedures instead of hiring full-time staff for each task. A significant benefit of choosing the correct service partner is that they can oversee daily operations and make recommendations for process enhancements.

Through co-sourcing, fund managers can use their technological stack while depending on service partners for duties like fund accounting, reporting, and compliance. This has the potential to be revolutionary, especially during periods of high demand. Fund managers who use co-sourced operations discover that they can respond to investor requests more quickly and have the means to continue operations even as they grow.

The Practice of Co-Sourcing

Because of its flexibility, more managers are already realizing the benefits of co-sourcing. For example, alternative fund service providers can use co-sourcing agreements to improve client data accessibility, expedite decision-making, and guarantee quick reaction to investor and market demands. With this strategy, fund managers can concentrate on higher-value pursuits like investor communications and portfolio management rather than administrative duties.

The Benefits of Co-Sourcing Strategically

Fund managers can strategically position themselves for growth through co-sourcing, which combines the advantages of keeping important tasks in-house with access to a service provider’s cutting-edge technology and industry knowledge. For more insights on fund administration strategies and operational improvements, you can explore Deloitte’s resources on investment management trends.

Does Your Fund Benefit from Co-Sourcing?

Only some people are a good fit for co-sourcing. Some fund managers may see it as a stopgap measure, eventually switching to complete outsourcing. Nonetheless, the concept can benefit managers who want to experiment with outside assistance while maintaining control over some internal procedures.

When determining whether co-sourcing is the correct fit, fund managers should consider their long-term growth goal, the administrative load of present operations, and their current technological setup.

The co-sourcing model allows fund managers to improve operational efficiency, satisfy regulatory requirements, and maintain competitiveness as the investment management sector develops further. By combining the talents of internal and external teams, fund managers can discover innovative methods to maximize their performance, satisfy client demands, and spur growth.

Contact GERAI LTD to find out how our expertise may help you with your fund administration requirements and provide a model that complements your fund growth plan.