The Golden Era Of Investment Operations Is Now

The 2020 investment operations conference, organised by Conexus Financial, brought forward many key factors shaping the industry including the ever evolving careers of those within it. To sum up the current state of investment operations in the words of Mine Super chief investment officer, “The golden era of investment operations is now.”

Instrumental drivers of change in investment operations have been across regulation and the evolution of technology, with focus on data gaining ground on the list for asset managers. Altogether, these changes have led to a change in the skill sets required to perform the ever-shaping roles. 

IFM Investors chief operating officer Lounarda David mentioned that regulatory translation is different and difficult for all and hence firms are embedding greater risk management and control frameworks across investment operations functions from historically it being managed largely by risk and compliance teams. This view corroborates Kaizen’s observation in the industry at the outset of 2019 of increasing demand for synergies in operations, risk and compliance skills; a trend of hybrid roles that we see persist well into the start of 2020.

With the changing nature of technology and its implementation, Laura Carbune consultant in private equity performance and analytics at Northern Trust indicated that hybrid models involving artificial intelligence and robotics would need skill sets to fulfil these changes. 

In the past, data science was a skill predominantly prevalent in IT teams, however with the push towards “operational alpha” and increased emphasis on collating, sifting, and utilising data this is now a key skill for operations teams and coding is fast becoming a prerequisite for some operational roles.

The panel on ‘What’s New with Data in 2020?’ highlighted the complexity involved in creating synergies between data internally and with counterparties across all investment vehicles and that the right management of data is critical. Successful data management requires a sound combination of the right journey, toolkits and infrastructure.

IHS Markit partner, head of financial services, APAC, Kiet Tran emphasised that open source technologies can be drawn upon and learnt easily to drive automation and process efficiencies. It can be brought about in the smallest of ways and need not be as intimidating as perceived.

Investment operations teams increasingly face the need to understand investments end-to-end from the middle office, to regulatory changes which drive further granularity in operational due diligence, IT and front office. ASIC senior executive leader, superannuation Jane Eccleston, put it simply, “front office is no longer the king of the castle.”

Identifying the right combination of skill sets for roles is progressively difficult to define and can confound the search for the right candidate but also impacts budgeting decisions. It naturally also transcends into structuring of teams and the culture of the department. 

Mine Super CIO Seamus Collins, underscored his focus on embedding further asset class specialisation within his teams and lifting capabilities across data analytics, quant and coding along with inculcating the culture of innovation given its relevance in this age of investment operations, and linking of it as a KPI for staff.

The ‘Careers and the Future for Investment Operations’ panel highlighted that with investment operations teams needing to learn to code, there is an increased workload owing to the constant need for up-skilling of staff to circumvent key person risks, leading to the need to hire additional headcount only for it to circle back to the dilemma of what the right candidate looks like.

Kaizen too recently highlighted that within operations recruitment, demand is exceeding supply of high-calibre cross-skilled candidates, and hybrid positions are transcending across combinations of skills within performance analytics, fund accounting, data management and analytics, middle office operations and client services. With a limited number of candidates bringing this ‘all-round’ experience to the table, identifying what can be brought and what can be taught is crucial.