Bringing Investment Management In-House: Know Before You Go!


Bringing investment management in-house has deep implications beyond where investment decisions are made. Without a well-defined strategy for how to support the end-to-end investment lifecycle, asset owners put themselves at risk and may never fully realize the intended benefits of increased flexibility, control, and lower cost.

In-house investment management requires a highly effective operating model, a robust technology and data infrastructure, as well as a specialized operations staff that can achieve the scale and flexibility necessary to adapt to a world of perpetual change and increasing complexity.  Any absence of these core pillars invariably leads to unanticipated time and energy being directed towards activities that do not directly contribute to the primary goal of meeting investment objectives through the most cost-effective means possible.  

More importantly, asset owners must be prepared to manage the inherent risks of inadequate or failed internal processes that could result in missed investment opportunities, regulatory missteps, and even financial losses. 

Upfront operational due diligence is a fundamental key to success  

Most of these concepts, at least in practice, will be new for asset owners who have traditionally outsourced investment management. Therefore, an upfront understanding of all the data and operational implications, knowledge of insourced vs. outsourced solutions, and a clearly defined end-to-end target operating model are a must. 

The journey requires a structured, thorough operational assessment supported by key insights into industry best practices, available marketplace solutions, and potential pitfalls to drive informed decisions and manage a successful transition. 

Essential steps: 

  • Needs assessment and gap analysis  
  • Insource vs. outsource assessment 
  • Service provider/vendor evaluation, due diligence, and selection 
  • Target operating model design 
  • Implementation and production readiness planning 

Completing these steps requires deep insight and a proven methodology. In the absence of resident expertise, asset owners should strongly consider a consulting partner who specializes in operating model design, service provider/vendor selection, and implementation.  

Olmstead is the partner who can lead asset owners through this critical journey. We have a unique data-centric approach that captures data and operational needs early in the process, allowing you to avoid common pitfalls and ultimately realize all the intended benefits of in-house investment management. 

Contact the author:

Joe DeRice 

[email protected]

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