The institutional and alternative investment management segment focuses on delivering discretionary investment advisory services for institutional, public sector, and individual clients around the world. Our services and unparalleled experience focus on delivering pragmatic solutions for improving the overall business performance of investment institutions, hedge fund managers, custodians, fund administrators and other industry service providers.
Capco’s active client list includes many of the world’s most successful investment managers and hedge funds.

Market issues

The industry is continuing to evolve and adapt to a new, more demanding, operating environment.

Some of the key trends that are presenting challenges for industry participants include:

• Complex trading and investment approaches – For many strategies, trading and market access has become a key contributor to and driver of investment performance. Coupled with an explosion in derivatives, commodities, and high frequency / algorithmic trading approaches, investment managers are challenged with managing increasing complexity while maintaining the agility to accommodate increasingly sophisticated investor preferences.
• Derivatives volumes – Continued growth in derivatives investing for alternative and traditional investment strategies is expanding requirements for more sophisticated approaches to investment modeling, valuation, settlements, corporate actions, and risk management.
• Globalization – The increasingly international scope of investment strategies and investor base is driving the demand for a more diverse global product mix; there are increasing requirements for efficient and scalable global operating models that leverage local relationships, insight and expertise, while looking to effectively share common capabilities and assets.
• Growing investor sophistication – Increased scrutiny of investment performance and transparency over fees along with growing expectations for detailed reporting across the investment portfolio are driving innovation and complexity of investment mandates and increasing client reporting requirements.
• Improving operations scalability and control – Achieving scale in asset classes remains an important operational imperative to cater for growing transaction volumes; innovative models that increasingly leverage third-party and offshore services seek to accomplish scalability requirements while maintaining the necessary control environment.
• Product innovation – Alternative investments led by growth in hedge fund and fund of hedge fund strategies, short extension (e.g. 130/30) strategies, UCITS funds, Exchange Traded Funds (ETFs), and retirement products and services, are presenting both business opportunity and operating challenges related to staff skills, technology, and business operations.
• Regulatory and compliance requirements - Expanding regulations, overlapping mandates and tighter enforcement continue to raise the cost of compliance and increase the consequences of non-compliance across geographic markets and jurisdictions. Regulatory and compliance initiatives remain among the highest priorities of investment managers operating across regions

Capco solutions

Every day, Capco works with leading Investment Institutions and Hedge Fund managers around the world to address these challenges. Capco’s expertise is focused on four services for investment managers:

• Business and technology consulting services – leverage Capco’s deep industry knowledge to assist clients with business planning and strategy, operational transformation, risk management and process re-engineering. Examples of  engagements include product strategy, sales compliance, STP services, process and workflow automation, and detailed requirements definition
• Business and technology architecture services – focused on the design of business operating models and architectures (business, organization, process and technology). Architecture planning also includes sourcing strategies and vendor selection services
• Vendor technology services – Expertise in the implementation and management of specific complex software packages for hedge fund managers and investment institutions. Capco has dedicated practices providing expert services for Advent Geneva, Murex, OpenLink, and Sophis solutions
• Integration services – focused on solutions to manage system, data, process and people integration (BPCM, Reference Data Management, Package Integration, Custom Development)

Case studies: Institutional and alternative investment management