Read the interview and learn about:
- Why M&A alone does not translate into alpha
- Why M&A increases existing data management challenges
- Taking a strategic approach to data management
- Reaping the benefits of system consolidation
By Duncan Cooper, Product Manager, Data Management & Connectivity, SimCorp
A flurry of M&A activity has swept across the global asset management landscape, shrinking the institutional investment market. Several asset managers have already taken the leap, with the aim of stemming outflows and heavy-discounting, in the face of cheaper passive investment vehicles. But while M&A may be a way to protect profitability, it often increases the burden of existing data management challenges. This article explores the practice of M&A and the strategic importance of data management.
The past 18 months have seen the merger of giants, Janus and Henderson, and Standard life and Aberdeen Asset Management. In continental Europe, Amundi, a conglomerate of France’s Crédit Agricole and Société Générale, bought Pioneer Investments, while in Asia Pacific, Japan’s Softbank acquired US alternative asset manager, Fortress Investment Group, for $3.3 billion.
M&A and the data management challenge
According to Casey Quirk, a practice of Deloitte Consulting LLP, asset management firms will soon experience the “largest competitive realignment in the industry’s history.” But while M&A may hold the key to clawing back the cost efficiencies which asset managers desperately seek in the immediate term, it also creates additional challenges: how to integrate two disparate organizations into one efficient and effective entity? The most significant is the challenge of data management, which is facing all asset managers but is exacerbated by M&A.
In the last decade, the rapid proliferation of data has evolved the way asset managers consume market, reference, and transactional data. Firms must source, process, store, and publish more data, more frequently, and with greater accuracy than ever before. This has significantly transformed the core requirements around how investment data is managed. With increasing volume and complexity, plus the increasing direct regulatory focus on data itself, neglecting data management is increasingly becoming a risk that no investment management firm can afford to ignore.