Cost and control issues grow for managing index, benchmark data – Rimes

Rimes Technologies Corporation, a provider of buy-side managed data services, says in a White Paper that costs and control issues are multiplying as the funds industry increasingly relies on index and benchmark data.

The company surveyed 275 data management, performance, risk, compliance and operations practitioners from 133 buy-side firms at 25 discussion forums through 2012. The results suggest that not only are index makers launching a growing number of increasingly complex products, but that clients are demanding increasingly sophisticated investment management techniques, including use of custom indices.

Together these factors are increasingly complexity and reducing profitability for all buy-side firms, Rimes said.

Alessandro Ferrari, SVP global marketing, said: “Global investment markets continue to endure the multiplier effects of the financial crisis, five years on. A lack of returns is driving product innovation and increasing the number of benchmarks required, while a constant stream of new regulation increases the cost of doing business. Profit margins are being squeezed, which makes planning and cost control difficult, and therefore all investment managers must do more with less.”

“As a result, most of the asset managers we spoke with have pursued cost management programs. Successful firms will be those that deliver a permanent increase in efficiency and return on investment.”

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