• This article explains how the financial industry’s digital investing solutions can optimize the tasks of asset managers.
• The information is directed at asset and fund managers looking to implement and distribute strategies more efficiently.
• FlexFunds offers an asset securitization program through high-technology digital solutions. For more information, do not hesitate to contact our experts.

Thanks to advances in technology and the development of capital markets, the investment management industry can benefit from a wide range of digital solutions that facilitate aspects such as efficiency, control, and the global distribution of strategies.

What do digital solutions mean for institutional investment?

Digitalization is redefining investment management, as new platforms integrate artificial intelligence (AI) and large-scale data analytics to improve efficiency and control.

These fintech or digital investing solutions have increased the accessibility and profitability of financial markets, facilitating the analysis and segmentation of risk profiles and supporting institutional decision-making.

At the same time, emerging technologies such as blockchain strengthen security and transparency in financial transactions.

Given this potential, according to KPMG, digital transformation must align with asset management, leveraging advanced analytics to optimize decision-making.

Latin America: Facing the technological challenge in asset management

In Latin America, where many economies are still developing, the asset management industry faces some challenges when seeking to implement technological changes, the most significant of which is related to infrastructure.

Regionally, asset managers face structural challenges such as legacy systems, multiple regulatory environments, and fragmented processes that reduce efficiency.

Nevertheless, significant opportunities are emerging through digitalization. For example, many managers wish to convert their illiquid assets into listed instruments to diversify funding sources and attract new capital.

To achieve this, there is asset securitization, carried out by companies like FlexFunds. This process allows the reach of strategies to be extended to international investors more simply, overcoming the local bias (“home bias”) and the limited liquidity of regional markets.

At the same time, there is an urgent need to incorporate key management tools, particularly those enabling centralized portfolio management, automated pricing, and more efficient distribution of strategies. 

What do asset managers value in today’s digital solutions?

Asset managers require certain features from digital investing solutions that allow them to perform their tasks more effectively:

Portfolio visibility, global access, and operational efficiency

Modern managers require comprehensive tools that provide full portfolio visibility, access to global markets, and efficient operations.

Advanced platforms enable comprehensive portfolio management, with sophisticated risk analysis and personalized strategies.

Connecting with international investors is also essential. For example, FlexFunds’ exchange-traded products (ETPs) are Euroclearable, which enables their international distribution.

In this way, investment strategies can reach international institutional investors in an agile manner.

In practice, managers seek solutions that combine advanced analytics (big data and AI) with transparent reporting. By demanding these capabilities, operational risks are reduced and investment decisions are improved in an increasingly globalized environment.

Reduction of operational friction and improvement in time-to-market

Agility is another critical requirement. Digital tools must minimize bureaucratic complexity and streamline the launch of new products.

For example, implementing a comprehensive platform can unify all processes into a single solution, reducing complexity and increasing efficiency.

This means automating manual tasks (NAV calculation, regulatory compliance and accounting) to accelerate daily operations.

Thanks to these advances, solutions like those offered by FlexFunds make it possible to issue an investment vehicle in very short timeframes. Specifically, the process of issuing a customized investment vehicle can be completed in as little as 6 to 8 weeks.

FlexFunds as a digital enabler in the issuance of listed investment vehicles

FlexFunds is a clear example of how a digital platform can orchestrate the entire ETP issuance cycle.

The company coordinates the asset securitization process from start to finish, designing the ETP, managing legal and operational structuring, and integrating the underlying liquidity.

Through its platform, FlexFunds integrates key services (exchange listings, fund accounting, back office, and NAV calculation) in an automated manner.

In this way, the manager sees results in real time: ETP prices are calculated continuously and distributed directly to investors’ brokerage accounts.

Furthermore, FlexFunds connects with global networks: all issued ETPs have their own ISIN/CUSIP codes and can be traded from any conventional brokerage account.

Added value in highly regulated and competitive environments

It is worth noting that FlexFunds’ proposition adds value especially in demanding markets.

By structuring each ETP through an Irish SPV, risk is isolated to the underlying asset, which simplifies regulatory compliance. This does not affect the company’s other operations and meets international transparency standards.

At the same time, the characteristics of ETPs combine the liquidity and flexibility of listed securities with agile fund management, allowing investors to be provided with clear reports (with all data consolidated) while minimizing issuance costs.

To learn more about FlexFunds products, do not hesitate to contact our executives. We will be glad to assist you!

Sources:

• https://hub.kpmg.de/en/kpmg-2024-asset-management-ceo-outlook
• https://www.mapfream.com/en/how-does-digital-transformation-benefit-the-investment-world/