Consulting Principal – Investment Operations and Outsourcing, Australia
Chanelle Crabtree has extensive experience consulting for the asset management industry in Australia for the past 20 years. Chanelle has considerable knowledge and expertise in investment management, outsourcing, and the development of operational models that support the investment management lifecycle. Chanelle leads Cutter Associates’ Investment Operations and Outsourcing practice, and oversees Cutter’s Australia office. She has decades of experience working for investment management firms, custodians, and consulting firms, in roles that included middle-/back-office operational, business analyst, project management, consulting, and senior management. She has a deep understanding of investment management, covering the operational, governance, and system requirements to support all types of clients, products, and asset classes.
A former Director at Deloitte, Chanelle led key engagements, particularly for complex clients with diverse asset classes, covering target operating model design, sourcing, and implementation. Prior to Deloitte, Chanelle was a Lead Consultant at Morse Consulting Pty Limited, where she led various engagements that covered target operating model design, sourcing of custodians/systems, and implementations with investment managers and superannuation clients.
Feb 22, 2024
As 2024 gets underway, we’re engaging with members who continue to evolve their operating models to align with trends we’ve identified in asset management. Through our increased engagement with Cutter Associates’ clients in Asia, we see a high level of alignment of their initiatives to support evolving investment capability through a scalable operating model that considers forced regulatory change. Again and again, we see key operating model themes surfacing that seem emblematic of what we can expect for 2024.
Key Operating Model Themes:
Mobilizing for T+1 settlement in the United States and Canada
Sourcing approaches to gain operational efficiencies
Improving performance reporting outcomes
Enabling self-service via modern data platforms
Integrating ESG throughout the investment life cycle
Mobilizing for T+1 Settlement in the United States and Canada
The move by the U.S. Securities and Exchange Commission (SEC) to T+1 settlement, which will cover both the United States and Canada beginning in May 2024, will have the most significant impact for Asia due to the difference in time zones. A limited crossover time frame will make it difficult to remediate issues with brokers to enable T+0 trade instructions into the market for settlement. Global portfolios must consider this misalignment in settlement timelines to ensure sufficient funding and ensure currency or hedging programs are aligned to minimise failed settlements and overdrafts.
Firms are reviewing their post-trade, cash, and corporate action workflows to ensure operations are ready to meet the new requirements. Both the UK and European markets are monitoring the outcomes of the shift to T+1; therefore, we anticipate this trend toward shorter settlement times to continue in the coming years.
In response to current economic uncertainties and challenging market conditions, asset managers are increasingly turning to no-code/low-code tools to enhance their operational optimization. These tools empower non-IT staff across various departments, fostering collaboration and communication within organizations and encouraging the development of innovative solutions. One notable advantage is the tools’ ability to expedite the creation and deployment of applications without relying on dedicated developers, which allows asset management firms and asset owners to promptly address specific project needs. Despite limitations, such as a potential lack of customization, the benefits, including optimizing simple tasks and effective data visualization using tools like Power BI, outweigh the drawbacks. The adoption of no-code/low-code solutions is driven by a desire to automate repetitive processes and create citizen developers within existing employee groups. Although challenges exist, the advantages are expected to drive increased adoption of these tools in 2024 and beyond, mainly as vendors introduce new features and capabilities.
Investment management firms are reconsidering their Performance Measurement and Attribution (PMA) processes and technology partners to ensure accurate analysis of investment decisions. The rise in complexity of underlying investments leads to PMA teams’ reallocation to value-added analysis and process automation.
Cutter Research sees indications that its members are planning to implement new systems and merge existing ones. While firms typically use best-of-breed systems, they’re considering more streamlined systems to support their PMA needs. Consolidation increases efficiency and may require sacrificing mature performance calculations, attribution analysis, GIPS, and overall workflow from a performance perspective.
Firms seeking to improve reporting are increasingly considering using a data mesh, an organizational approach to data architecture that treats data as a product managed by separate domain teams. While there is no specific platform for a data mesh, Snowflake is often seen as a key technology for implementing it. In this architecture, domain teams are typically responsible for data ingestion, transformation, and quality control. Snowflake provides a self-service data platform that supports domain-driven data ownership and federated governance. Other tools like Fivetran, dbt, Collibra, and Alation can be integrated with Snowflake to complete a data mesh architecture, reducing the need for centralized IT resources.
Firms are experiencing complexity while attempting to incorporate ESG (environmental, social, and governance) factors into their investment frameworks. Many firms have focused on the “E” pillar (environmental) by analyzing data on climate-related criteria. However, ESG encompasses more than just the environment, and metrics need to be incorporated for the “S” (social) and “G” (governance) pillars as well. Conflicting views and interpretations also make it challenging for firms to determine what makes an ESG investment “good.” Firms seeking to improve in this area need additional raw ESG data, scrutiny of methodologies, and AI algorithms to develop a deeper view. Ultimately, what’s considered successful or good in ESG investing depends on the perspective being used.
For a more detailed look at Cutter’s views on the year ahead, see our 2024 Trends, Themes, and Predictionsblog posts. Questions? Feel free to contact us anytime at [email protected] to discuss these topics in more detail.
