Globalisation
| Date: | July 2008 | |
| Author: | John Robertshaw | and Catherine Doherty |
For investment managers and their business partners, globalisation presents commercial opportunities to distribute their products outside their traditional markets. As domestic and near domestic markets mature firms look for growth opportunities beyond their traditional markets. These growth opportunities are applicable to both retail and institutional business.
By itself this does not provide the justification for establishing a network of overseas offices. Managers have invested in global markets for many years and have successfully serviced non-domestic clients from a single logical domestic office. However as the focus for many firms moves towards a more global distribution of their client base the pressure for a local presence in the major financial centres intensifies.
This report distinguishes between firms that have a global presence and those that are globally integrated. The former may have worldwide exposure to markets and clients but there is little evidence of a globally integrated operating model. The latter have a common brand and product set supported by a global model.
To understand the approaches to globalisation that investment firms are adopting, the report considers the differences between:
- The business models which describes the company’s appetite for globalisation.
- The investment model which shows how the investment products need to be supported.
- The operating model which defines how the manufacturing and distribution capabilities are supported.
The research then identifies models for a range of different global businesses. All these models face organisational, operational and technology issues in providing support to their businesses. The research then goes onto address how firms are progressing towards globalising their business - there are a number of features that we feel characterise best practice.
Table of contents
| Management Summary | 1 | ||
| 1.0 | Introduction | 3 | |
| 1.1 | Scope | 4 | |
| 1.2 | Methodology | 5 | |
| 2.0 | Definitions | 7 | |
| 2.1 | What is globalisation? | 8 | |
| 2.2 | Manufacturing and distribution | 9 | |
| 2.3 | Global markets and non-domestic clients | 10 | |
| 2.4 | Global presence and global integration | 11 | |
| 2.5 | Characteristics of a global investment manager | 12 | |
| 3.0 | Why Globalise? | 13 | |
| 3.1 | Economic factors | 14 | |
| 3.2 | Market readiness | 16 | |
| 3.3 | The global client? | 19 | |
| 3.4 | Why are firms globalising? | 20 | |
| 4.0 | How Investment Firms Globalise | 23 | |
| 4.1 | No approach is perfect | 24 | |
| 4.2 | Business model | 25 | |
| 4.3 | Investment model | 28 | |
| 4.4 | Operating model | 30 | |
| 5.0 | The Internal Effects | 35 | |
| 5.1 | Internal organisation - bricks, pyramids and spheres | 36 | |
| 5.2 | The global operating model | 38 | |
| 5.3 | Back office | 39 | |
| 5.4 | Front office support | 42 | |
| 5.5 | Client management and performance | 44 | |
| 5.6 | Technology | 47 | |
| 6.0 | Globalisation and Support Services | 51 | |
| 6.1 | Global asset servicing | 52 | |
| 6.2 | Data and software products | 54 | |
| 7.0 | Establishing an Overseas Office | 55 | |
| 7.1 | Developing a local presence? | 56 | |
| 7.2 | Culture | 59 | |
| 8.0 | What does Best Practice Look Like? | 61 | |
| 8.1 | Best practice observations | 62 | |
| 8.2 | Best practice criteria | 63 | |
| 8.3 | Global systems deployment | 66 | |
| 8.4 | Leveraging the parent | 69 | |
| 8.5 | Obstacles to globalisation | 70 | |
| 8.6 | Globalisation in other industries | 71 | |
| 9.0 | Conclusions | 73 | |
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