Efficiency Is the New Alpha: What Smart Managers Are Letting Go

While performance remains a traditional driver of growth for investment managers, the operational foundations that support financial results are undergoing rapid transformation. At the heart of this change is a reevaluation of what truly constitutes a core competency and a growing recognition that outsourcing certain functions may be the key to efficiency and scale.

Among the areas drawing increased attention is data, more specifically, the management and reporting of data to institutional consultant databases. Long considered a box-checking exercise, consultant database reporting is undergoing the same transformation seen in digital marketing, where traditional SEO is being overtaken by AI-powered search. Just as marketers now optimize content for context-rich, AI-driven queries, investment managers must now ensure their profiles are complete, accurate, and strategically structured to be surfaced by advanced screening tools used by allocators and consultants. Yet the task of gathering, cleaning, and structuring data for these platforms is resource intensive and technically demanding, pulling investment teams away from higher-impact activities that drive asset growth.

Although there is a cost associated with outsourcing, at the same time, consultant databases are evolving rapidly, demanding more comprehensive, accurate, and timely profiles that must now be tailored for discovery via advanced algorithms and natural language search. For many small and mid-sized managers, these pressures can create a sense of being outpaced, especially when the cost of outsourcing or investing in new technology or internal resources appears daunting or uncertain in ROI. This is where outsourcing enters the conversation — not as a cost-cutting tactic, but as a strategic decision.

Boston Consulting Group notes that firms are embracing a “zero-based mindset,” scrutinizing every element of their operations and asking what should be rebuilt, automated, or outsourced. Their 2025 report, Becoming Radically Leaner, found that outsourcing of mid- and back-office functions, particularly those tied to data infrastructure, is accelerating. The rationale is clear: it allows firms to eliminate duplication, reduce operating risk, and reallocate internal resources to high-value functions like investment strategy and client acquisition. PwC’s recent Asset and Wealth Management Revolution report echoes these findings. In a survey of more than 260 managers globally, over 80% reported outsourcing at least some non-core operations to partners with specialized infrastructure. These firms, often operating on leaner budgets, see outsourcing not as a compromise, but as a scalable way to expand their reach and maintain operational excellence without building from scratch.

Meanwhile, data centers have emerged as a significant investment priority, climbing to the number two spot for asset managers, with 40% prioritizing data center investment over the next two years, according to the KPMG 2025 Asset Management Industry Outlook.

The case for outsourcing consultant database reporting is growing stronger. As scrutiny on reporting, governance, and transparency increases, from both institutional investors and regulators —many managers are finding it difficult to keep up with demands using in-house resources alone. According to research highlighted by Irish Funds and Private Funds CFO, 88% of managers believe they need to increase their use of third-party specialists in the next 12 months, with nearly half expecting to do so significantly.

The benefits are clear. Specialized providers not only bring technology and automation but also the domain expertise required to ensure that data is consistent, compliant, and competitive. These partners can integrate directly with internal systems or databases, streamlining the production of consultant-facing profiles and reducing the risk of human error. In doing so, they help managers remain “search-ready” in consultant databases, a vital edge in winning institutional mandates.

Moreover, outsourcing enables managers to shift from tactical to strategic engagement with their vendors. For firms willing to think beyond transactional vendor relationships, these partnerships can offer leverage and differentiation.

Ultimately, investment managers that align their operational models with strategic partners are not only better equipped to manage complexity, they’re also better positioned to grow. By outsourcing resource-intensive but non-core tasks like database reporting, they can direct their capital and attention where it matters most: building performance, serving clients, and raising assets.

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