Costs are on the rise, overall productivity is decreasing, and profit margins are facing increased pressure. Discover how the world's leading institutional investors are strategically implementing cost-saving measures to initiate transformative changes that have a measurable and sustainable impact on profit margins.
In the current economic landscape, maintaining cost discipline is crucial, especially as markets fluctuate and Assets under Management (AUM) experience rapid growth. However, with the recent market shift, many asset managers and pension plans in Ireland are realising that their cost bases are expanding at a faster rate than their AUM. Effectively managing expenses has now become a primary focus for numerous institutional asset management boards, CFOs, and executives.
Improving margins :
Discover how leading investors are using cost-saving measures
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Overview
Pulling the right cost levers
Today, many institutional investors have started to explore a range of tactical cost optimisation levers aimed at realigning their existing cost structures. Focus of these initiatives falls into three broad areas of consideration:
Budget Reviews: The intent being, just because we spent it last year, doesn’t mean we need to spend it this year. Institutional investors are carefully reassessing their budgets based on actual use and realigning forecasts accordingly; discretionary budgets are a great place to start.
Procurement: In times of material system growth, you often need to spend money to make money. Now is the time to go back and right-size that spend to align to a very different current (and future) reality. Institutional investors are assessing their current use of systems and outsourced services and then using that information in their next contract negotiations.
Resource optimisation: People are always seen as client’s most valuable resource. They are also ordinarily the greatest expense. During times of growth, many institutional investors competed for talent. Nobody wanted to let rare capability go, even if it wasn’t optimally productive.
Get in touch
If you have any queries about cost optimisation in institutional investment, please contact Jorge Revilla or Feargal O'Reilly of our Asset Management practice. We look forward to hearing from you.
Jorge Fernandez Revilla
Partner, Head of Asset Management
KPMG in Ireland
Feargal O'Reilly
Director
KPMG in Ireland