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
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
As per the latest report with over 150 asset owners
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
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Defining the asset owner’s transformation:
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
