Learn how a large-scale asset manager found efficiencies in outsourcing their middle-office solution to a trusted partner.
In recent years, there has been a trend for asset managers to outsource key administrative functions to third-party service providers. Asset managers can reap a number of benefits by offloading these tasks to an institutional service provider that offers an outsourced middle-office solution.
A large-scale CLO manager recently appointed U.S. Bank as its provider of middle-office and financial reporting services. The client is one of the largest CLO managers in the world – with an extensive portfolio that includes assets across the United States and Europe.
A complete suite of solutions for asset managers
This large client turned to U.S. Bank to manage the following middle-office services, among others:
- Cash and portfolio reconciliation
- Compliance and waterfall calculations
- Processing interest payments and paydowns
- Tracking and reconciling trades and positions
- Reviewing monthly investor reports
- Preparing data daily for portfolio manager trading
- Administration solutions
Solving for a lack of back-office infrastructure
According to Michael Zak, senior vice president and business development officer at U.S. Bank Global Corporate Trust, “Managing an in-house operations team, hiring talented individuals and training staff takes a considerable amount of time, energy and money. More importantly, it pulls asset managers away from focusing on their core business objective of managing the portfolio.”
“We possess the necessary resources and network, along with the systems and technology, to handle the asset manager’s back-office work,” adds Matt Clarkin, senior vice president and product manager at U.S. Bank Global Corporate Trust. He says that the U.S. Bank team can leverage industry best practices for all of its institutional clients. “We have more than 500 professionals, including specialized middle-office team members, providing the operational expertise and infrastructure that asset managers require.”
Outsourcing back-office tasks is especially beneficial in high-cost locations where maintaining a large staff is expensive, such as New York City, according to Clarkin. “Outsourcing provides asset managers with cost certainty; they don’t have to worry about rising employee benefit costs or staff turnover,” he says, adding that it also eliminates key-person risk. “Operations aren’t thrown into upheaval if a key employee leaves. Outsourcing helps stabilize operations from a cost and personnel perspective.”