Fund group mergers prompt managers to review oversight processes

Increasing merger and acquisition activity among fund groups is driving a surge in managers reviewing their oversight processes, according to research by technology solutions firm Milestone Group.

Oversight is relevant to fund managers who outsource fund processing and accounting but verify the output in-house, and was brought to the fore in 2013 by the FCA’s Thematic Review.

The survey found that 40 per cent of managers have enhanced their oversight processes or systems in the past 12 months, while 40 per cent plan to review their oversight processes or systems in the next year and 40 per cent have reviewed their processes in the past 12 months.

Corporate activity and switching third party administrators were the two key reasons given for reviewing oversight processes.

Global fund managers with a combined total of £1trn in assets under management were canvassed for the research.

Paul Roberts, managing director, EMEA at Milestone Group, says: “There was a buzz of interest in oversight post the thematic review in 2013 and today there is a new wave returning, focusing on the technology capabilities of oversight systems.

“Increasing corporate activity with a number of mid-tier managers coming together to form top tier businesses is having a heightened impact on oversight processes and systems too.”