DTCC Connection

Sep 01, 2011 • DTCC Connection

‘Bedrock Foundation Spurs Market Growth’

by Rich Marulanda


Donald F. Donahue, DTCC president and CEO, raised awareness of the need to reshape the managed accounts and alternative investments spaces with a recent posting on the NICSA (National Investment Company Service Association) News Blog.


His commentary, Bedrock Foundation Spurs Market Growth, called attention to the operational hurdles that exist in these two sectors, underscoring the importance of leveraging an infrastructure organization that has partnered with the mutual fund industry for a quarter-century to reduce risks and costs, gain scalability and increase operational efficiency.


"Today, most separately managed account processing lacks a central communications infrastructure and standardized practices," wrote Donahue. "In a business that oversees more than $1 trillion in assets, these limitations pose significant operational barriers to growth, while keeping the cost and risk of account processing extraordinarily high."


With an industry trend moving away from separately managed accounts toward unified managed accounts and model management programs, Donahue explained, "There is a unique opportunity to address these challenges at the outset by implementing a single platform that centralizes and streamlines communication between investment managers, overlay portfolio managers and program sponsors."


Donahue also noted that the alternative investment community faces similar obstacles. "Despite the fact that alternative investment vehicles are again emerging as a top investment strategy in the asset management landscape, market participants continue to wrestle with risk, cost and processing challenges, including a heavy reliance on email, faxes and cumbersome spreadsheets," he wrote. "Clearly, this market too would derive significant benefits from a single, automated platform that provides endto- end processing."


About NICSA

NICSA is the leading provider of independent education and networking forums to professionals in the global investment management community. Its membership includes nearly 10,000 people in the investment management industry and the firms that support the industry, including mutual fund complexes, investment management companies, custodian banks, transfer agents and independent providers of specialized products and services.


Donahue's full commentary was posted on NICSA's News Blog, LinkedIn and Facebook pages as well as NICSA President Theresa Hamacher's Twitter account. To visit the blog, go to blog.nicsa.org and search DTCC.@


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