In the wake of plummeting revenue streams, particularly with client concerns over operational risk and managers’ needs to control costs, the lines between traditional investment managers and hedge funds have blurred and will continue to do so. Traditional investment managers and hedge funds alike need to focus on the business of managing money as well as the management of the assets. Though the industry’s historically high margins have allowed managers to pay scant attention to the decidedly unglamorous and hugely complex expense side of the business, they must do so now. The winners will be those who manage their firms as well as they manage their clients’ portfolios.
While buy-side revenues are driven by assets under management, costs and, ultimately, profit are driven primarily by the number of accounts and secondarily by the number of products or strategies the firm offers. Even with automation, more…
Read on at The Glass Hammer.
Filed under: Hedge Fund / Alternative Investment Management, Managing the Business, Published Article, Traditional Investment Management, hedge fund, investment management, margins
In part two of FTF News’ Q&A with Holly Miller, Stone House Consulting’s founding partner, discusses how to get IT and operations to work together effectively, the survey on investor communication and operational risk that Stone House is conducting with Infonic AG and innovative ways buy-side firms can leverage social media. Part one of the Q&A is here.
