Leading fund managers reveal top priorities for year ahead

London - 2 August 2006

- OTC derivatives tops the list -

Investit Intelligence, the research forum dedicated to the operational issues of the fund management industry, has revealed the UK’s largest investment management companies’ top priorities for spend and focus in the coming year.

The 32 investment management companies and third party administrators who attended Investit Intelligence’s Summer Conference in July, highlighted the following as either being a big area of spend or an area they will be watching with interest over 2006/7:

- OTC derivatives (89%)
- Client service including reporting (86%)
- MiFID (83%)

The operational and technology challenges associated with OTC derivatives ensures they are top of most COO’s agendas. Investit Intelligence has completed substantial research into this area to help its members share best practice experience and in June 2006 a new practice, Investit Technology, was launched to provide enhanced systems consulting and strategy, including systems selection, implementation and integration for buy-side firms. The need to adapt systems or implement new technology to keep up with the speed of developments in the OTC derivatives markets has been one of the key drivers of demand for this new practice.

MiFID continues to be a key area of concern for fund managers, as the date for compliance draws closer. None of the investment management companies attending the Investit Intelligence conference said that they had got this sorted. To help investment management companies understand the implications of MiFID and plan their budgets and projects, Investit has developed a MiFID Toolkit which provides a streamlined, fast gap analysis with a practical list of projects for the IT and operations areas.

The Summer Conference also revealed lesser concerns for managers. Only 25% of managers are prioritising merger and acquisitions and only 51% of managers are considering increasing headcount. Outsourcing has also fallen back as a priority, from a similar survey conducted at the January Intelligence Conference – only 55% considered outsourcing as a priority, compared with 76% just six months ago.

Catherine Doherty, Principal at Investit comments, “The survey of leading fund managers attending the Investit Intelligence Summer Conference has enabled us to predict key areas of interest and focus for spend in the year ahead. The use of derivatives, MiFID and client service improvements have all been areas Investit Intelligence has concentrated on recently and will remain a top priority as we continue to assist our members in staying ahead of the game.”

Investit Intelligence plans to conduct comprehensive studies into three nominated areas on behalf of the investment management companies who are members of the Investit Intelligence service. The areas chosen for detailed research will be announced next month.

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