The Rise of Co-Sourcing and Lift-Outs
In recent decades, emerging fund managers have increasingly turned to fund administrators to streamline operations, reduce costs, and mitigate risks. By outsourcing key functions, they’ve been able to focus more on investment strategies and growth. This trend is expected to continue into 2025 and beyond. However, what about established firms who began operations before this model became popular? How are they adapting to the new demands for operational efficiency, reduced risks, and investor satisfaction? The answer lies in evolving operational strategies such as co-sourcing and lift-outs.
These models provide established fund managers with a blend of efficiency, flexibility, and risk management while preserving some internal control. In this article, we explore how these strategies are transforming operational models for older asset management firms and enabling them to compete in a rapidly changing financial landscape.
Challenges for Established Firms: A Changing Landscape
Many established fund managers have spent years building their operations without the benefit of outsourced administrative functions. While this structure may have worked in the past, today’s complex regulatory environment and increased investor demands are prompting many managers to reconsider their operational models.
Read what our subject matter expert, David Goldstein, had to say in Uncorrelated here.
