Asset Owners Operating Model, Trends and Factors influencing Transformation (2024)

The difference between ‘asset owner’ and ‘asset manager’, that boundaries can be blurred. Often referred to as limited partners (LPs), asset owners are generally the institutions or people – pension plans, insurance companies, official institutions, banks, foundations, endowments, family offices and individual investors – who own the actual assets.

Asset manager refers to the institutions that manage money, securities and other forms of the asset on behalf of an asset owner. Their goal is to grow the value of the assets under their management. The asset managers include mutual fund managers, investment advisors, alternative investment managers, financial advisors, and wealth managers– in this digital day and age – Robo-advisors as well.

Asset owners are those institutions who are in charge of owning and maintaining the assets. The asset owners employ asset managers to grow the AUM and to get a profitable return on their investments.

Asset Owners (LP's) Stakeholders

Asset Owners Operating Model, Trends and Factors influencing Transformation (1)

Currently, most asset managers use excel based tools for asset allocation, they are under constant pressure to reduce costs due to industry consolidation of AUM. Most of asset owners are looking at the

  1. Master custodian model and reporting
  2. Single Reporting platform across multiple systems

As per the latest report with over 150 asset owners

Asset Owners Operating Model, Trends and Factors influencing Transformation (2)

Asset owners want to enhance transparency and are structuring their investments to help them achieve increased transparency. Due to the cost pressures, they are eager to lower costs and avoid the 2% management fee and 20% performance or ‘carry’ fee structure that is common in the alternative asset space.

Another key driver is regulatory changes, in both the UK and Canada, legislation has encouraged the merger or pooling of local government pension funds to create not-for-profit asset managers that can help to build scale in the local government pension sector by providing asset management to other funds

Factors that are defining the Asset owner's Transformation

1.Consolidation / M&A (i.e. with other funds)

2.Expanding investments into new asset classes/markets

3.Insourcing of investments to internal fund managers

4.Outsourcing to an Outsourced CIO /Manager of Managers

5.Outsourcing to external fund managers

6.Revised governance and investment standards (including ESG)

7.Technology transformation

Defining the asset owner’s transformation:

Asset Owners Operating Model, Trends and Factors influencing Transformation (3)

What are the business areas that are driving transformations for asset owners?

ESG and Data management dominate today’s asset owners’ transformation agenda, the top 15 areas where the projects are being worked on today.

1.ESG oversight

2.Performance reporting and Analytics

3.Product construction and asset allocation

4.Compliance Reporting

5.Internal reporting and MIS

6.Trade execution and Order management

7.Organizational Governance – Ops process re-engineering/ restructuring

8.Investment book of records (IBOR)

9.Collateral Management

10.Transfer Agency

11.Investment Research

12.Reconciliation

13.Asset Servicing

14.Accounting book of records (ABOR)

15.Fund Administration

Asset Owners Operating Model, Trends and Factors influencing Transformation (2024)

FAQs

What are the key factors contributing to success in the asset management space? ›

Key Success Factors for Asset Management
  • Identify right price for assets.
  • Know the reorder point for assets.
  • Figure out the right place to sell and distribute assets to multiple offices.
  • Accurate assets data – the asset data will be highly accurate with the most recent physical state available for each asset.
Aug 9, 2017

Which asset management practices are recent trends adopted by organizations for business transformation? ›

Top 10 Asset Management Trends to Follow
  • AI and Digital Transformation.
  • Transparent Reporting.
  • ESG Integration.
  • Passive Investing and ETFs.
  • Risk Management.
  • Remote Work and Collaboration.
  • Blockchain and Cryptocurrency.
  • Client-Centric Solutions.
Apr 12, 2024

Who are the asset owners? ›

Asset owners are entities that manage investments on behalf of participants, beneficiaries, or the organization itself, and include pension funds, endowments, foundations, and sovereign wealth funds.

What is the difference between asset owner and asset custodian? ›

Asset custodian will commonly be a Service Owner but may also be the owner of a non-technical business service or process. Asset owner means an individual who holds accountability for an information asset. An asset owner is the owner of specific data elements, wherever the data resides.

What are the 5 P's of asset management? ›

Understanding the 5 P's of asset management can provide a structured approach to managing assets effectively. This article delves into the 5 P's—Planning, People, Processes, Performance, and Portfolio—and how they contribute to a robust asset management strategy.

What are the 3 pillars of asset management? ›

To summarize, effective asset management revolves around the three interconnected pillars of inventorying assets, assessing conditions and hazards, and maintaining assets.

What are the three major trends in changing the organization? ›

Top 7 organizational trends that are changing the way we work
  • Learning in the flow of work.
  • The impact of AI on organizational learning.
  • Collective sense-making.
  • Engaging employees in your company purpose.
  • From one-off change processes to continuous development.
  • Implementing change is about facilitation.
Jan 7, 2020

What can companies do to balance growth and transformation? ›

  • 1 Understand your growth drivers. ...
  • 2 Foster a culture of innovation. ...
  • 3 Manage your innovation portfolio. ...
  • 4 Align your organization and processes. ...
  • 5 Monitor and measure your performance. ...
  • 6 Learn and improve continuously. ...
  • 7 Here's what else to consider.
Oct 26, 2023

Which actions can companies take to support business model transformation? ›

The key to a successful transformation is to identify new opportunities, rethinking existing value propositions, and embracing new technologies to create a more innovative and profitable business model.

What are the key responsibilities of an asset owner? ›

to have professional credentials, to follow an accepted body of knowledge and fair practice and to have the discipline of continuous learning. Asset owners should manage their associates' performance against these standards and assume public responsibility for them.

Who are the biggest asset owners? ›

The Government Pension Investment Fund of Japan remains the largest asset owner in the world, with an AuM of $1.4 trillion alone, the firm said.

What is the difference between asset managers and asset owners? ›

The asset managers include mutual fund managers, investment advisors, alternative investment managers, financial advisors, and wealth managers– in this digital day and age – Robo-advisors as well. Asset owners are those institutions who are in charge of owning and maintaining the assets.

What are assets an owner takes out of a business? ›

Often, this is cash, but it could also be assets like machinery or accounts receivable. In any case, these are personal assets that are used to fund the business. Withdrawals. This is the dollar value of resources (usually cash) taken out of the company by the owner for personal use.

What is the asset owner risk owner? ›

In summary, while risk owners focus on the overall risk management process, including the identification and treatment of risks, asset owners have a more specific responsibility for protecting and managing individual assets.

Why is asset ownership important? ›

Asset ownership is important for several reasons. First, it provides security and stability to the owner, who can enjoy the benefits of the asset and protect it from unauthorized use or seizure.

What are the factors that contribute to a successful IT asset management function? ›

To manage IT assets effectively, adopt a centralized ITAM system, conduct regular audits, streamline procurement and deployment, ensure compliance and software license management, utilize tracking for maintenance, and adopt secure disposal practices.

What are the factors to consider in asset management? ›

Key success factors
  • Control of, and accountability for, assets is established at the program level;
  • Fiscal responsibility for assets is established through the budget process and by attributing and allocating costs;
  • Establishing condition, use and performance measures; and.

How do you succeed in asset management? ›

Some of the key skills required for a successful career in asset management include: Strong financial modeling and writing skills. Strong knowledge of financial markets, asset classes and risk. Ability to assess an investment's potential for return.

What are 3 factors that impact what your asset allocation should be? ›

Factors that can affect asset allocation

When making investment decisions, an investor's asset allocation decision is influenced by various factors such as personal financial goals and objectives, risk appetite, and investment horizon.

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