Getting Ahead: Managing the Year’s Biggest Business and Economic Challenges

Economic and Operational Forces Impacting Investment Firms 

As economies slowly come back, economists believe we can safely say that a global recession has been avoided. 

However, the persistence of inflation and high interest rates presents a significant challenge, causing many firms to feel pessimistic about their revenue outlook. Only 10 percent of investment firms surveyed by Deloitte believe their revenue will grow significantly in 2024.  

Increased regulations are causing further challenges. Deloitte also reports that the SEC's full rulemaking agenda is likely to drive an increase in regulatory intensity for US investment management firms in 2024.  

Alternative data is a bright spot in these trends. Today, more firms recognize the value of non-traditional data sources and see data as an opportunity to gain a competitive edge. 

The demand for this data is so strong that Deloitte predicts the market size of alternative data providers will surpass traditional financial services data providers by 2029. 

But while firms believe in the value of this data, many are struggling to access it or effectively put it to use in their investment firm, missing out on a potential strategic advantage. 

Top 4 Strategies Investment Firms Use to Overcome Current Market Challenges 

Amid all this change, investment firms are not standing still.   

Our SS&C leaders report that investment firms that maximize their resources—creativity, technology, human capital, and data—gain a competitive advantage.  

Here 4 of the strategies our experts see firms applying in 2024: 

Diversification of Assets and Strategies 

To keep pace with market changes, many investment firms are diversifying their investment strategies and asset classes. 

Interest in fixed income has been growing for some time. There is also increased demand for ETFs, SMAs, and alternative investments like private credit and mortgage-backed securities.  

This diversification helps firms find new growth opportunities within a challenging market. 

Streamlining Operations and Gaining Efficiency as Asset Classes Expand  

As firms diversify, they often add technical solutions to process these new asset classes. But all too often, these solutions don't connect well to other technology in the firm, introducing labor-intensive processes that slow operations and increase costs.   

To make asset class expansion successful, investment firms need to adopt solutions that meet each asset's unique needs while continuing to look, feel, and offer the same institutional-level performance firms rely on when managing more traditional asset classes.  

Only when these assets can be processed in this streamlined way can the benefits of asset class expansion be fully realized. 

Learn how to maintain efficiency throughout asset class diversification.

Doing More with Less by Outsourcing  

In times of reduced revenue and increased operational complexity, outsourcing is becoming even more prevalent. Investment firms of all sizes increasingly rely on service partners to handle technology and operational functions.   

Through outsourcing, investment firms can liberate their resources to concentrate on the work they excel at – generating returns for investors – while harnessing external expertise for tasks like reporting and increased regulatory compliance.   

Balancing resources in this way enhances a firm’s resiliency and scalability while helping them prepare for the future. 

Learn how firms are enhancing operational efficiencies and improving their bottom lines with outsourcing.

Leveraging Alternative Data: Gaining a Decision-Making Advantage   

More and more investment firms are incorporating alternative data into their investment decisions to gain a competitive edge.  

However, firms can only make an impact with data if they are confident that they are accessing timely, accurate information. To achieve that goal, investment firms are looking for solutions that consolidate data management, reporting, analytics, and procurement.   

These tools not only enable firms to harness the benefits of alternative data without the need for additional infrastructure, but they also empower them to make more efficient data-based investment decisions.   

Your Technology Partner for Today and the Future  

Investment firms are countering market headwinds by employing new strategies, seeking new partnerships, and making the best use of technology.  

At SS&C Eze, our experts are helping them with that fight.   

We bring decades of experience helping a diverse group of investment firms navigate various market conditions. We have the technology, services, and expertise firms need to navigate the market headwinds of 2024 and whatever lies ahead.  

Take a closer look at today’s market conditions and opportunities. Download our new State of the Investment Industry ebook.