Asset Management Case Studies: Anatomy of Three Outsourcing Deals

June 19, 2002


Boston, MA, USA June 19, 2002

In a new report, Asset Management Case Studies—Anatomy of Three Outsourcing Deals, Celent showcases how PIMCO, Barclays Global Investor, and the asset management group within Union Planters Bank are leveraging outsourcing to enjoy operational benefits and attain their strategic goals. The case studies review the motivations behind the decision to outsource, the provider selection process, transition planning, and results to date.

Summary of Outsourcing Arrangements

"By outsourcing, asset managers can focus on higher-value activities including product and market development, distribution, and client service, while transferring commodity back- and middle-office functions to experts who can conduct these operations more economically. In terms of technology, outsourcing also ensures continued maintenance and upgrades and eliminates large, up-front capital outlays," comments Pamela Brewster

, an analyst at Celent and the author of the report.

Along with the case studies, the report provides insights into the factors spurring asset managers’ interest in outsourcing; the benefits derived from outsourcing; the various providers in the market, and a checklist for assessing an outsourcing arrangement. The report also explores whether it is advantageous to be a first-mover in this area and whether outsourcing is a fad or long-term trend in the industry.

"With growing competitive pressures in the industry, we think it’s only a matter of when, not if, outsourcing will become a common phenomena," add

s Brewster. "The only question will be which activities to outsource and which to keep in-house." A Table of Contents is available online.

Asset Manager/Outsourcing Provider Details of Deal

Goals: Accelerate entry into new markets in a cost-effective manner, gain operational efficiencies.

Outsourced Functions: Handling of all investment operations capabilities including securities trade order processing, custodian communications for settlement and accounting, technology applications support, global network support.  State Street assumed 269 PIMCO employees as well as PIMCO's operations facilities in Newport Beach, California. Outsourcing Model: Lift-out

Goals: Replace disparate systems with a unified, state-of-the-art accounting and securities processing platform.  Gain middle-and back-office efficiencies and reduce operating risk.  

Outsourced Functions: Global custody, fund accounting, corporate actions, reconciliation, trade matching and settlement.  Investors Bank assumed 270 BGI staff as well as BGI's operations facility in Sacramento, California.

Outsourcing Model: Lift-out

Goals: Build a robust wealth management platform to attract and retain high net-worth clients.  Shift focus from pure asset management to fee-based advice and service.

Outsourced Functions: Trust accounting, workflow management, information storage, account aggregation, client and advisor Web-based interfaces and tools, Transfer of 75 staff from Union Planters to SunGard.

Outsourcing Model: Business Service Provider (BSP)

of Celent Communications' Institutional and Retail Securities & Investments research services can download the report electronically by clicking on the icon to the left.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents


Boston, MA, USA June 19, 2002

Asset Management Case Studies:  Anatomy of Three Outsourcing Deals

Return to report Abstract


  The Value of Outsourcing 5
  Choosing an Outsourcing Provider 6
  Outsourcing Models 8
  Wait-and-See vs. First Mover 19
  Fad or Long-Term Trend? 20

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