These are austere times for fund managers. The long bull
run of the 1990s made everyone drunk on record highs for indices
and the juicy returns that came with them. With the market
corrections came the hangover and the realization that the good
times would not go on for ever and that portfolio management wasn't
simply a game of buying stock and watching it go up and up.
With increased pressure to produce returns, investment houses are
looking around for ways to save a few basis points in costs here, a
few there. Even these relatively small amounts, the arguments run,
can make a difference.
In this environment the debate over the value of outsourcing the
back office will inevitably take greater prominence.
As Daron Pearce, managing director, European outsourcing services
at Bank of New York, says: "There has been a massive increase in
competition between asset managers, and...
