Survival of the fittest

Every market change provides opportunities for those willing to adapt.  Darwinian as that is, it’s often the case that the largest are most reluctant or slowest to adapt.  With investors pushing for a higher level of transparency, even the fittest fund managers must change their approach.  New fiduciary requirements and the need to immediately access investor information is proving to be an arduous task.  Top that with forthcoming regulations e.g. FATCA, AIFMD and Form PF, and fund managers face an uphill struggle.  To avoid extinction and meet these new demands, funds must evolve by turning to Third Party Administrators (TPAs).

Thus, opportunity knocks for those TPAs who are able to deliver. Those with the right technology and superior customer service will help funds succeed in this new world order.  TPAs need the right tools to be able to communicate with clients cost effectively and in multiple formats according to the fund’s needs.  They need to show which reports were delivered and when, how and to whom they were delivered. TPAs need to respond to fund managers with ad hoc reports and custom content within tight timeframes.  In addition to streamlining reporting, TPAs must produce compelling output for clients that can give them a strong response to investor due diligence. Finally and perhaps most importantly, TPAs need to have the confidence that they can do all this while maintaining the integrity of the data.

There is an opportunity for the entire TPA industry to deepen its relationship with the buy-side, offering services that bolster revenues, customer loyalty and margins.  Yet, if history is any guide, it will probably be a few agile, fast-moving firms taking market share from larger competitors that spur the industry to embrace the new market realities.