| Mark Tennant | ||||||
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 margins are under a great deal of pressure.