Posted on 20 July 2020
How Cyprus Fund Managers Benefit from Outsourcing
Fund managers in Cyprus can take advantage of the many benefits that outsourcing back and middle office administration functions provides. By transferring these operations to a trusted, proven provider, funds can gain a host of important competitive advantages that enable them to focus on what they do best: growing investment returns for their clients. There are, however, important points to clarify as part of a fund’s outsourcing provider benchmarking process.
Common outsourcing doubts among fund managers
Outsourcing a fund’s administrative operations is, of course, a massive decision and reservations regarding doing so are only natural. “Fund managers may have doubts as to the ability to scale with an outsourced setup,” says Alkis Kailos, Alter Domus Country Executive Cyprus, “and after performing these functions in-house for what is often years or even decades, the issues of trust and culture when outsourcing are, understandably, areas that funds want total peace of mind on.”
To address these doubts, a benchmark outsourcing provider should have a demonstrable track record, as well as use technology that enables smooth scalability, and dedicated teams that align with the specific working practices of a given fund.
What are the benefits of outsourcing back and middle office?
With the right back and middle office outsourcing provider, fund managers can generate workflow and performance improvements across their business. These include the following:
1. Massive cost reduction while accessing unrivalled expertise
It’s far more financially sound for a fund manager to outsource their fund administration to a benchmark service provider rather than investing in setting up their own in-house fund administration team. Moreover, the right specialist fund administrator provides the kind of experience and insider expertise instantly that is very difficult to match by hiring employees for internal positions.
2. They can dedicate more time to making investments
By entrusting a specialist fund administrator with decades of experience that has been at the forefront of back and middle office technology development, fund managers can free themselves from operational, risk and compliance functions and obligations. “At Alter Domus, we’ve seen that management teams are able to focus more on the key aspects that generate the most value, which positions them to better achieve their growth aspirations,” says Alkis.
As a result of outsourcing key and ancillary operational functions, funds can channel their resources into generating superior investing outcomes. They no longer have to draw time and energy away from portfolio management and business growth.
3. Timely compliance with ever-changing regulations
Funds’ focus can often be required to manage compliance with a range of regulatory obligations. Not only can compliance be a complex process, regulators often impose deadlines and other obligations to do with technology and procedures.
The right specialist outsourced provider can remove this obligation from funds’ desks entirely. With a best-of-breed service in timely regulatory compliance, detailed reporting, and data record-keeping and audit trails, both for regulatory obligations and to support business decisions with rich data insights, funds realize excellent regulatory performance, while enabling themselves to focus on growth.
4. A greater ability to grow as a business
It is well-documented that funds face unprecedented challenges. These include much sharper competition, satisfying increasingly high investor demands, digital transformation, and the aforementioned ongoing task of keeping up with resource-intensive regulatory compliance. The right specialist outsourced provider meets many of these needs for funds. For instance, they scale in line with a fund’s growth, or reduce capacity should a fund require downsizing; they update and develop technology that enables funds to remain as competitive in the market; and they take care of the time-consuming and technology-reliant roles of risk management and compliance.
“It’s critical to be able to scale up with a fund as it grows, or to scale operational support back should a fund require it. This capability offers funds peace of mind that they aren’t limited as to their growth potential and that they can reduce back and middle office coverage if they need to, which is something that is more difficult to do with an in-house team,” says Alkis.
Discover unprecedented performance gains by outsourcing
Fund managers in Cyprus who outsource their middle and back office functions to Alter Domus immediately gain an important competitive advantage. They have more time to focus on what they do best, which in turn gives their investors more confidence. Alter Domus has a dedicated office located in Cyprus, which is staffed by expert professionals in the Cypriot financial, business and regulatory landscape.
These include specialists across the different asset classes, meaning clients always work with someone who speaks their specific language. And at the backbone of all of this is a globally leading organization with exemplary processes, procedures, and protocols that all ensure timely and efficient delivery of value-added solutions.