M&A Growth Prompts Asset Managers to Maximize Compliance Savings

The asset management industry is witnessing a wave of consolidation, driven by several factors including continued pressure to reduce fees as investors demand more for less and advances in technology. To survive and thrive, fund companies are merging, acquiring smaller players or streamlining their product offerings. The quest for economies of scale and cost efficiencies has become paramount, reshaping the landscape, and forcing fund managers to adapt.

Shifting Landscapes

PwCpredicts that fund consolidations, M&A and fund event activity will continue to increase for years to come. Digital transformation and rapidly changing customer expectations have led 73% of asset managers to consider a merger with, or acquisition of, another asset manager, according to a surveywith 250 firms. By 2027, one in six asset and wealth managers globally will have merged away or ceased operations. By 2030, they anticipate up to 20% of mutual fund firms will be acquired or eliminated, with mega managers accounting for up to 65% of mutual fund AUM.

Asset Managers undergoing structural changes are met with the added complication of identifying various required notice filings across each jurisdiction when going through a merger or acquisition. Not only does this additional activity add further complexity, it also poses the risk of driving up Blue Sky notice filing fee expenses.

Overcome Fee Pressures with the Right Compliance Partner

To enable asset managers seeking quick and simple ways of achieving cost efficiencies and reducing the impact on their bottom lines to attract investors with lower fees, SS&C has helped many clients achieve significant cost savings while maintaining compliance with Blue Sky regulatory requirements.

Below are just some examples of how SS&C Blue Sky Administration has helped our clients navigate through such costly and challenging events to deliver seamless compliance and eliminate unnecessary compliance expenses.

Share Class Re-Designation

One client recently performed a share class re-designation impacting seventeen classes. The SS&C Blue Sky Administration Fund Consultation team analyzed the request and consulted with jurisdiction regulators to identify filing options resulting in savings of $153,000 compared to the industry standard approach to filing.

• Industry Standard:$176,011
• After SSC Analysis:$23,272
• Savings: $153,000

Merger / Fund Launch

Another SS&C Blue Sky Administration client acquired a small fund company, merging with existing share classes and launching new funds under the acquiring company. SS&C's Fund Event Consultation team was able to identify filing options that resulted in savings of $118,000 compared to the industry standard.

• Industry Standard: $338,600
• After SSC Analysis: $220,572
• Savings: $118,000
  

Trust Consolidation

A third SS&C Blue Sky Administration client recently consolidated trusts, impacting three portfolios. Rather than approaching the event in the simplest manner, SS&C was able to confirm a cost-effective approach, saving the client $109,000 in Blue Sky filing expenses.

• Industry Standard: $130,593
• After SSC Analysis: $21,375
• Savings: $109,000

"As a result of our conversion to SS&C Blue Sky Administration, our Blue Sky process has transformed into a more robust compliance program overall. Our relationship with SS&C is a true partnership versus that of a typical vendor relationship. They utilize a proactive approach to compliance and provide us with excellent consulting, strategy and expertise to ensure we are well ahead of compliance matters and that we do so in a cost-effective way. This partnership has additionally streamlined our state compliance process and led to significant cost savings via the identification of applicable exemptions. I can also say that our internal team is now stronger and more knowledgeable of Blue Sky compliance since transitioning to SS&C, due to their willingness and ability to share information and compliance interpretations with us in a way that is easy to comprehend.

Dennis Joseph

Associate Director, Regulatory Services, Invesco Investment Services, Invesco

How do we do it?

SS&C Blue Sky Administration has helped many of our clients who have recently faced complex fund events such as share class re-designations, merger/acquisitions and consolidations. Our comprehensive solutions for managing compliance across all jurisdictions, alongside a dedicated team with deep Blue Sky knowledge, and established relationships with all jurisdiction regulators have delivered complex filing requirements in the most cost-effective manner.

The team evaluates each event, leveraging professional guidance on regulatory options, and undertakes robust analysis to present the most cost-effective Blue Sky filing options and provides jurisdiction consultations to clarify requirements.

Get Started Today

If you're an asset manager considering a merger, acquisition, consolidation or any other type of fund activity, get in touch today with our experts to capitalize on our consultative cost-reduction approach to Blue Sky regulations, while ensuring you always remain compliant.

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