This “virtuous circle” says Keith, is driving many of the investment reviews. By bringing in talent, asset owners better understand their data. By understanding the data, they are moved towards a greater asset management role, because they can see how they can take control. “This is also good for the asset management industry,” says Keith, “because the client can define what they want from mandate and you can be sure there will be a better relationship between manager and clients as a result.”
BRAVE NEW WORLD
The pensions arena is slow to adopt new forms of technology. Hosting has achieved a begrudging acceptance thanks in part to the presence of Bloomberg terminals.
The growth of cloud computing is now rapidly advancing the adoption of new technology among asset owners. This is not only because cloud makes it easier to access technology than before, but at a considerably lower price, opening doors for smaller schemes that were previously very firmly closed.
Dealing solutions are also available from banks, as is access to overseas trading desks – formerly reserved for asset managers or other banks – to funds that have sufficient volumes to have an interest in a region without actually wishing to set up a local office, all at the touch of a button.
However, funds must stop treating technology as though it operates in its own little world. It is essential not because it produces essential data, but because it is the data. Those who wish to have a greater understanding of the nuances of their scheme’s investment strategy must be prepared to accept someone else’s word – their provider or adviser – or hire their own people to give them the skinny.
“Those who don’t may not have the richest data – and in many cases may not require it,” says Alpha’s Benson. “But those under £1bn simply don’t have the scale or income to be able to build the team,” which is the essential component of this application of technology.
That said, the industry is moving at a rapid pace that is quickening, says InfraHedge’s Keith.
“Not everyone is there yet – and not everyone will need to be there – but like any change, it must start with the board of trustees and they must have the right people and partners for technology on board.”
