Challenging market outlook reveals the power of partnership

April 25, 2023

This year’s dynamic investment landscape presents asset managers with new opportunities and new challenges. Learn how drawing on the expertise of an experienced service provider can help you navigate this complex market.

Download PDF »

Asset managers are looking toward 2023 and wondering how to navigate the wealth of opportunities offered by one of the most complex market environments in a long time. Rampant inflation has provoked the fiercest tightening cycle in more than a decade, which in turn has elevated the risk of a U.S. recession and the Federal Reserve continues to consider future interest rate increases to slow down the economy. Meanwhile, volatility is putting pressure on portfolio returns and investment managers are reeling from investors’ scrutiny of fees. 

It is an unusually dynamic situation, and fund managers need to give investment strategy and client communication their full attention. This leaves them little time for the operational aspects of the business, where a growing regulatory and compliance commitment has added to their operations, accounting and treasury management responsibilities. 

All of this is happening against a backdrop of a tight labor market coupled with asset managers considering moving core operations to lower cost locations within the U.S. and abroad.  Acquisition of talent and the latest technology has become difficult, time-consuming and expensive. 

Support across the board

There is a way through this complexity, and that path involves assessing your service provider relationship and relying more on them for their expertise, capabilities and support. Top service providers can assist through the entire transaction ecosystem, from beginning to end. Whether the fund manager is a start-up that needs to rely on a service provider for almost the entire process while it builds its own internal capabilities, or a well-established investment manager that just needs to fill a few gaps, a service provider gives immediate access to experience, expertise and reliability. And it will only pay for what it uses. 

Good service providers are equipped with middle- and back-office capability run by technology that is likely to be the newest and backed by healthy budgets.  Even better is a global provider that can cover almost every investible market, opening up access to new securities and geographies that allow for opportunistic trades and new products. The best service providers will also have a wealth of data on demand to identify and analyze those opportunities and quantify the operational and market risks involved, which will help managers make better investment decisions. 

“Clients utilize our data at the more complex end of the spectrum,” said Dylan Curley, global head of business development for U.S. Bank Global Fund Services.  “So having that technology is of the utmost importance.” 

Cash management, compliance and the value of outsourcing

Since March 2022, the Fed has raised interest rates numerous times, and has signaled that there are further increases to come. A decade of almost zero rates caused many firms to downsize or even dismantle trading desks that had become uneconomical. Suddenly, cash management is a revenue generator instead of a cost center, and many asset houses lack the expertise to take advantage of it: they no longer have an internal solution, and it would take time and money to rebuild. 

Global service providers offer the full suite of cash-management products across multiple platforms. And because they have never left the business, they are also data rich. They have the historical market data that improves decision-making, and the client data that gives them a holistic overview of the entire portfolio – including segregated accounts. 

“Earning spread on your idle cash has become critical,” said Curley. “We’ve played a significant role in pulling together the data across a client’s book to get them what they need to maximize every dollar.”

Data collection also helps with transparency, which is increasingly important. Clients today are demanding. They want to know where and how their money is invested, and what and where the risks are.  

Since the global financial crisis, the regulatory and compliance burden on asset managers has increased and evolved. Major financial institutions have gone from having a compliance officer to an entire department. For all but the biggest institutions, this can be a substantial financial drain, so outsourcing reporting to a dedicated team of experts could be a valuable solution. This would reduce any fear of falling behind new regulation, and asset managers would be reassured by having a team available to create every report and meet every deadline. 

“It’s all about taking that operational burden of investors, regulators, daily data off their plate,” said Kevin Weeks, global head of business development for U.S. Bank Global Corporate Trust and Custody. “Essentially, what we’re trying to do is give the investment manager the ability to make a better decision – a more informed decision.”

Partnerships give funds flex appeal

In the financial industry, standing still is going backwards. Economies of scale are increasingly attractive, which is prompting larger fund houses to acquire smaller ones. The ability to adapt is greatly enhanced by a partnership with a global service provider to generate scale and capacity when they are needed – in technology, products, data or reporting. It is a partnership that makes the asset manager bigger in terms of capability, but still lean in terms of overheads. 

This is vital for asset managers that want to expand into new markets, such as a U.S. manager aiming to launch a European fund. Waiting to hire and build internal capability can mean missing the first-mover advantage and chasing the market. The best service provider will already have everything the asset manager needs, plus an experienced team to offer guidance, which leaves the fund manager time to do what it does best – make smart investment choices. 

“When you pick a good partner, you can take advantage of market scenarios,” added Weeks. “If you had to go hire people or set up new technology, you’d miss the investment opportunity.”

Affordable access to an all-star team

The market outlook for 2023 has more two-way event risk than most fund managers are used to, just as analysts are warning of lower investment returns. And while managers will have to put more resources into investment strategy and decision-making, demands for greater transparency of information from both clients and regulators are growing.

A top-tier global service provider can ease that pressure by taking over the majority of transaction, execution and settlement tasks, as well as the administrative burden of middle- and back-office functions that all but the biggest firms have disbanded. Effectively, a provider like this gives financial institutions the ability to rent an all-star team, rather than having to buy one of their own.


You deserve a partner that can continuously support your changing business needs. At U.S. Bank, we have the experience, expertise and resources to help you grow and to achieve your goals.

Learn more about how we pair innovative technology with dedicated professionals to provide our clients with comprehensive investment services solutions.

Contact us or visit our website for more information on our full suite of fund services.

Related content

Best practices for optimizing the tech lifecycle

4 benefits of independent loan agents

Innovative payroll solutions may help attract hourly workers

Changes in credit reporting and what it means for homebuyers

What’s the difference between Fannie Mae and Freddie Mac?

How jumbo loans can help home buyers and your builder business

Crack the SWIFT code for sending international wires

The reciprocal benefits of a custodial partnership: A case study

Ways prepaid cards disburse government funds to the unbanked

The client-focused mindset: Adapting to differing personality types

Technology strategies to complement your business plan

An asset manager’s secret to saving time and money

A checklist for starting a mobility program review

Easing complex transactions: Project finance case studies

CFO survey: A shifting focus on ESG in business

What corporate treasurers need to know about Virtual Account Management

Why retail merchandise returns will be a differentiator in 2022

Look to your custodian in times of change

Challenging market outlook reveals the power of partnership

Save time with mobile apps for business finances

High-cost housing and down payment options in relocation

Managing complex transactions: what your corporate trustee should be doing

New technology streamlines M&A transactions

Tapping into indirect compensation to recruit foreign talent

At your service: outsourcing loan agency work

Automate escheatment for accounts payable to save time and money

Why other lenders may be reaching out to your employees

How institutional investors can meet demand for ESG investing

Avoiding the pitfalls of warehouse lending

Digital Onboarding helps finance firm’s clients build communities

Middle-market direct lending: Obstacles and opportunities

Treasury management innovations earn Model Bank awards

Sustainability + mobility: Trends and practical considerations

What is CSDR, and how will you be affected?

Bits and bots: CRE trends for 2023 and beyond

Time is money: Intelligent Payment Routing saves businesses both

Overcoming the 3 key challenges of a lump sum relocation program

How RIAs can embrace technology to enhance personal touch

Mortgage buydowns and subsidies in today’s talent-focused relocation policies

For today's relocating home buyers, time and money are everything

Crypto + Relo: Mobility industry impacts

CFO report: Driving growth via new business models and technology

CFO insights: Leading the recovery for sustainable growth

ABL mythbusters: The truth about asset-based lending

Flexibility remains essential for public sector workforces

Easier onboarding: What to look for in an administrator

ABCs of ARP: Answers to American Rescue Plan questions for counties

The client-focused mindset: What do clients expect?

Webinar: CRE Digital Transformation – Balancing Digitization with cybersecurity risk

Start of disclosure content

U.S. Bank Global Corporate Trust is a trading name of U.S. Bank Global Corporate Trust Limited, U.S. Bank Trustees Limited and Elavon Financial Services DAC (each a U.S. Bancorp group company). U.S. Bank Global Corporate Trust Limited is a limited company registered in England and Wales having the registration number 05521133 and a registered address of 125 Old Broad Street, Fifth Floor, London, EC2N 1AR. U.S. Bank Global Corporate Trust Limited, Dublin Branch is registered in Ireland with the Companies Registration Office under Reg. No. 909340 with its registered office at Block F1, Cherrywood Business Park, Cherrywood, Dublin 18, Ireland D18 W2X7. U.S. Bank Trustees Limited is a limited company registered in England and Wales having the registration number 02379632 and a registered address of 125 Old Broad Street, Fifth Floor, London, EC2N 1AR. Elavon Financial Services DAC (a U.S. Bancorp Company), trading as U.S. Bank Global Corporate Trust, is regulated by the Central Bank of Ireland. Registered in Ireland with the Companies Registration Office, Reg. No. 418442. The liability of the member is limited. Registered Office: Block F1, Cherrywood Business Park, Cherrywood, Dublin 18, Ireland D18 W2X7. Directors: A list of names and personal details of every director of the company is available for inspection to the public at the company’s registered office for a nominal fee. In the UK, Elavon Financial Services DAC trades as U.S. Bank Global Corporate Trust through its UK Branch from its establishment at 125 Old Broad Street, Fifth Floor, London, EC2N 1AR (registered with the Registrar of Companies for England and Wales under Registration No. BR020005). Authorised and regulated by the Central Bank of Ireland. Authorised by the Prudential Regulation Authority and with deemed variation of permission. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

All banking services are provided through Elavon Financial Services DAC. U.S. Bank Global Corporate Trust Limited and U.S. Bank Trustees Limited are Trust Corporations and not banking institutions and are not authorised to carry on banking business in the United Kingdom, Ireland or any other jurisdiction.

U.S. Bank Global Fund Services (Ireland) Limited is registered in Ireland, Company Number 413707. Registered Office at 24 - 26 City Quay, Dublin 2, Ireland. Directors: Eimear Cowhey, Ken Somerville, Brett Meili (USA), James Hutterer (USA), Hosni Shadid (USA). U.S. Bank Global Fund Services (Ireland) Limited is regulated by the Central Bank of Ireland.

U.S. Bank Global Fund Services (Guernsey) Limited is licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 2020, as amended, by the Guernsey Financial Services Commission to conduct controlled investment business in the Bailiwick of Guernsey.

U.S. Bank Global Fund Services (Luxembourg) S.a.r.l. is registered in Luxembourg with RCS number B238278 and Registered Office: Floor 3, K2 Ballade, 4, rue Albert Borschette, L-1246 Luxembourg. U.S. Bank Global Fund Services (Luxembourg) S.a.r.l. is authorised and regulated by the Commission de Surveillance du Secteur Financier.

Elavon Financial Services DAC Luxembourg Branch (trading as U.S. Bank Depositary Services Luxembourg) is registered in Luxembourg with RCS number B244276 and Registered Office: Floor 3, K2 Ballade, 4, rue Albert Borschette, L-1246 Luxembourg, regulated and authorised by the Central Bank of Ireland (CBI) as well as by the Commission de Surveillance du Secteur Financier (CSSF). Details about the extent of our authorisation and regulation by the CBI and the CSSF are available from us on request.

Elavon Financial Services DAC, trading as U.S. Bank Depositary Services, is regulated by the Central Bank of Ireland and is registered in Ireland with the Companies Registration Office Reg. No. 418442. The registered office is Block F1, Cherrywood Business Park, Loughlinstown, Dublin 18, Ireland D18 W2X7.

Investment products and services are:
Not a deposit ● Not FDIC insured ● May lose value ● Not bank guaranteed ● Not insured by any federal government agency

For U.S. Bank National Association:
Deposit products offered by U.S. Bank National Association. Member FDIC. U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments.