It wouldn’t be amiss to liken the role of a fund manager – be they traditional, hedge or private markets – to a participant in a game of 3D chess. Both require the juggling of endless variables and extreme levels of detail. Both require a substantial amount of ‘planning ahead’ as well as ‘retrospection’ to stay in the lead. Both require thorough ordering and orchestration of what you know and what you need to know, which keeps you firmly on the knife edge between winning and losing.
If that wasn’t enough, fund managers also have to contend with a healthy dose of uncertainty – more uncertainty than we’ve seen in decades – in the form of rampant inflation, global energy crises, geopolitical unrest and a bull market that’s being taken over by the bears.
And just when they’ve come to terms with all that, they’re expected to rip up the rule book and start re-learning how to prioritize the old economics of profit and yield with new ESG-driven, ethically enlightened weightings of value and worth.
Throw it all together, and you get a recipe for high volatility. But volatility is just one side of a double-edged sword, and with more volatility comes more scrutiny.
The unbearable tension of volatility, scrutiny and productivity
Unusual fears, such as sharp spikes in inflation and increasingly tense geopolitical situations, breed unusual results to be investigated. While fund managers wouldn’t typically face pressure to prove the methods in their madness – especially when all involved parties are turning a profit – in times of volatility, investors need reassurance that, quite frankly, fund managers know what they’re doing.
Under these circumstances, fund managers find themselves interrogated on why certain decisions were made, why opportunities were missed and whether the optimum approach was taken. As this scrutiny continues, questions will no doubt be asked about whether the right people are doing the right jobs, and a heightened interest in management costs, back-office efficiencies and ESG clarity is to be expected.
In these uncertain situations, fund managers must be able to demonstrate the research they have conducted, the workflows they have chosen, and the processes they have followed to assure investors that, despite the chaos around them, they’re taking the right actions, driven by the right data, at the right time.
After all, scrutiny, while perhaps not to this extent, isn’t an entirely new concept for funds. They’ve accepted a certain degree of it as part of the job in recent years as their legal and compliance risks have rocketed, and regulators and investors have become increasingly critical of their ability to comply with ever-evolving regulations and seemingly moving goalposts.
As a result, any fund manager that’s lasted this long has undoubtedly become very good at managing their proprietary data as they’ve streamlined their research processes and continued to tap into new and existing investment opportunities. But they haven’t done that alone. The same is equally true for startup funds that are getting off on the right foot with a solid approach to data. That will often entail a purpose-built system for storing all their institutional knowledge, regardless of asset class.
Productivity in the face of chaos
How best to manage periods of high volatility and the resultant scrutiny lies in research management systems (RMS). These platforms are essential in helping public, hedge and private markets fund managers navigate geopolitical pressures, ESG directives and fluctuating market conditions – not to mention evolving best practices and rising pressure from investors.
Bipsync provides one such modern RMS, helping funds across the globe collect and manage all their organizational knowledge. Whatever the data, Bipsync’s highly configurable dashboards and natively open API allow it to be filtered and displayed for easy access and effortless insights.
Already engineered for stringent regulatory requirements, Bipsync RMS provides all the tools needed to keep track of records, manage data and monitor communications, ensuring peak productivity in the face of volatility.
For more on how RMS can help your organization, check out the guide on “How to Align Data, People and Processes” to learn about the three phases of effective research management.
Keep an eye out for part two in this blog series, where we’ll take a deeper dive into the ways in which fund managers can use their RMS to not only survive a volatile market but thrive in its uncertain waters.