This Luxembourg based roundtable discussion on the future of transfer agency took place in January 2008 and was held as a follow-up to a previous study that included fund promoters, distributors and service providers in 11 European countries.
As this blog tries to focus more on the IT system side of the business, I would like to point out 3 conclusions that were drawn:
- "Despite the fact that the overwhelming majority of those interviewed expect that there will be a great deal more automation in the next three years nearly three quarters of those surveyed do not believe that there will be much more consolidation in this business over this time period."
- "Everyone agrees that the European TA business is operationally inefficient in that it is not capable of handling increasingly complex fund structures coming onto the market today in any volume. The issue is what can be done about it. Faxes are still the most common method settling fund transactions with STP rates well under 50%."
- "There is a widespread view that there will be convergence of in the long only and alternative fund industries and that this will have significant consequences for the TA process in the future. In particular the industry is increasingly looking for generalist TA systems that combine the features required to do long only and alternative funds. Systems capable of dealing with share equalisation are now a must, said many interviewees."