In its latest 2018 alternative asset management industry trend outlook Indus Valley Partners (IVP) warns that traditional and alternative asset managers will face a number of hurdles in 2018.
The search for alpha in the current market environment will push managers to continue to re-evaluate fund infrastructure and seek better ways to navigate and control firm-wide data reckons Indus Valley latest study.
With pressure growing from investors and regulators, many asset managers will also be seeking ways to unlock alpha through quantitative strategies, alternative data sets and machine learning.
IVP has identified three key trends for 2018:
Digitalization driving operating model changes in both alternative and traditional asset managers:
AI and machine learning will become mission critical in the search for alpha in order to better understand and engage with clients. Blockchain/DLT/Asset token-ization will be used in pilot programs to achieve post-trade operational efficiency and for better regulatory compliance. Simply hiring a Chief Data Officer (CDO) will not be enough; across pre-trade, trade and post-trade activities, asset managers need to rethink how they use Fintech to deliver investment value and operational scale.
Alternative data sets grow in popularity:
Alternative and traditional asset managers, particularly quantitative traders such as hedge funds, will actively look to tap “dark” data in pursuit of obtaining an investing edge; looking to social media-based sentiment analysis to confirm an investment thesis or to find long/short trading opportunities. This trend will only increase in pace as alpha is sought/found in unstructured “dark” data that requires expertise in Big Data, AI and Machine Learning to uncover and exploit its hidden value.
Enterprise Data Analytics & Information Modelling:
Volume, velocity and variety of data will overwhelm asset managers unless they leverage an entirely new set of tools and techniques. Both alternative and traditional managers are facing pressure to innovate and reduce costs of their operating platforms with increased outsourcing. Managers will need the ability to control and navigate firm-wide data to increase innovation and manage operating risks, specifically with multi admin and multi counter party outsourcing models.
“Offering the most robust data management and data governance solutions in the industry, IVP plays a key role supporting clients in their pursuit of alpha. Our breadth with our latest platform additions and fast growing managed services offering across the industry is a testament to the depth of our expertise and extensive global research employed to monitor the industry. As we look to 2018, we will continue to provide our clients with industry leading innovative solutions,” said Gurvinder Singh, CEO of Indus Valley Partners.
With over $1.5 trillion of global hedge fund AUM managed using IVP technology, IVP continues to showcase that it is in the vanguard of partners that provide global asset managers with the most advanced solutions to meet their evolving needs.
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