Part two in our two-part blog series on the wide-reaching impacts of a volatile market and how fund managers can best overcome them.
When the market changes at a moment’s notice, fund managers have to seize the fleeting window of opportunity before them. They need to sift through all the available data fast enough to unearth and act upon the investment opportunities that each shift introduces. Pinpointing this timely intelligence is a difficult and resource-intensive task, not to mention time-consuming, and having sufficient agility to do so can influence investment performance.
Unfortunately, these exogenous shocks – instances in which an unexpected, unpredictable event significantly impacts market performance across industries, countries or even globally – are becoming increasingly frequent.
Taking the most recent of these unrelenting market shocks as an example, the ongoing conflict in Ukraine has had a seismic impact on oil and gas prices, resulting in a highly volatile and wholly unpredictable market for such commodities. But these shocks don’t need to be world-halting to cause volatility; every day, markets fluctuate this way or that, presenting a new landscape for managers to contend with.
Traditional commodities and stocks aren’t the only asset classes impacted by short-term volatility; demands for investment scrutiny are warranted across the board from private markets to pensions and fund of funds.
While some managers and allocators may turn to safer, more predictable investments in response to these shifts, many will spot an opportunity to benefit from adjusting their positions accordingly – providing they act quickly enough.
But they must be able to react in real-time as they figure out how to mitigate the risks associated with volatility, all whilst communicating assurance to stakeholders and illuminating a way through the chaos.
To do so requires the ability to stop and analyze the market in a matter of minutes. By quickly and easily mining insights from years of proprietary research, managers can equip themselves with actionable insights that help them back up crucial decisions and meet unexpected opportunities head-on.
Deep dives without delay
It’s evident that 1) managers with clear and robust risk management insights, an eye for opportunity and the ability to respond with all available intelligence at their disposal are the ones who will thrive in these uncertain times, and 2) without a structured system in place, trawling deep lakes of seemingly unrelated data to inform this critical decision making at pace is a very tall order.
Instead, they must rely on a research management software (RMS) that’s designed to do just that. Alleviating managers of the burden of sorting through years of data and proprietary research, such platforms enable managers to navigate compliance management, funds, projects, tasks, documents and more in no time at all. This saves them valuable time and puts them in the best possible position to seize any opportunities that volatility throws at them.
It’s in these moments that our modern RMS platform comes into its own. Bipsync RMS offers fund managers instant access to a wealth of configurable, easy-to-navigate data lakes, helping them switch lanes and capitalize on sudden opportunities in a pinch. We’re big believers in the notion that a great RMS is one that’s seen, not heard, and accommodating to the point of invisibility. As such, our solution is fast, frictionless and unobtrusive. It’s there when it’s needed and out of your way when it’s not.
With Bipsync RMS by their side, managers needn’t shy away from volatile markets. Quite the opposite – they’ll have everything they need to lean into volatility and find comfort in chaos as they chase new and lucrative market opportunities straight through the eye of the exogenous storm.
This has been part two in our two-part blog series on standing firm in the face of volatility, following our exploration of the scrutiny volatility breeds and the impact this can have on fund managers’ productivity in part one. If you’ve found this blog insightful, you can read part one here.