Outlook 2016: Todd Moyer, Confluence
Todd Moyer is the executive vice president of global business development at Confluence.
What were the major themes of your business in 2015?
The key theme we saw in 2015 was a focus on defragmenting back-office data and technology. Over the past several of years, there has been a number of regulatory mandates that have required managers to collect and report more information about their business. The flux of new, single-function technology to respond to these mandates has led to a fragmentation of the back office which increases operational complexity and risk. It also diminishes the value that each solution provider delivers.
Over the course of the year, we saw asset managers and third-party administrators seek out solutions to help them begin integrating their data and technology. This push to defragment the back office is driving much of the thinking behind how we develop new offerings for the market. We expect this trend will continue in 2016.
What are your expectations for 2016?
Asset managers are still feeling pressure from regulators, but they are also feeling increased pressure from institutional investors, who are taking a more significant role in the push to standardize back-office reporting processes in the asset management industry. Pressure from investors to improve data management and reporting capabilities becomes a business opportunity, so we predict that data management reform in the asset management industry will top C-level agendas in 2016. Our view is that the industry is on the verge of a data management revolution, and we are excited to be in a position to help drive this revolution.
One example of how institutional pressure is impacting the industry is in private equity, where there’s been growing concern over risks associated with self-administered funds. One of the biggest catalysts for this concern was the Madoff scandal in 2008. Given the long investment lock-up periods in private equity, it is now becoming a key issue that can impact whether an institution will invest in a private equity fund. We think there will be a number of private equity firms that outsource their back office to an administrator in 2016. Our view is that this is a great opportunity for third-party service providers to expand their support capabilities and play the same role they do in other asset classes.
Finally, we think regulatory fatigue will continue in 2016 as the asset management industry prepares for the next round of mandates. That is likely a trend that will continue for the next several years, as we adjust to a regulatory environment that is focused on better managing systemic and liquidity risk.