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Expected priorities for CFO time
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performance realistic ? “ Those allocating money to private capital funds will often have had significant exposure to traded markets , where they are accustomed to high degrees of transparency ,” says Chitra Baskar , chief operating officer and global head of funds and product at Intertrust Group . Coming from a mindset which is constantly looking at the data , they bring that investment culture to the private markets , where , she suggests , “ the relative lack of information leaves them less comfortable than they would like ”. In addition , as their allocation to private markets grows and they grapple with separately managed accounts , the need for more information increases . “ When I see some of the survey respondents asking for live or daily updates , I think that should be read as a need for funds to demonstrate that
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Portfolio performance Operations Regulation
Investor demands Cyber-security
ESG Diversity and inclusion
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they have their fingers on the pulse of the markets , if not on a daily basis , then at least on a much more periodic basis than at present ,” she adds . By contrast , CFOs appear to be over-estimating the need for frequent updates on environmental , social and corporate governance ( ESG ) and diversity and inclusion ( D & I ). Anecdotal evidence suggests that priorities in this regard may well shift over time . The relatively recent increase in the profiles of these two aspects of investment and organisation may account for their ranking in CFO expectations . Outcomes from ESG and D & I implementation strategies are , however , difficult to assess over a short time frame . Nevertheless , the demand for more detailed information is likely to increase , if not in frequency , then at least in granularity .
CFOs were asked to select up to three areas that they expect to have the biggest draw on their own time and resources . Figure 2 shows the relative ranking of expectations in this regard . The first pie chart , for example , shows that portfolio performance and operations are considered most likely to require direct involvement of the CFO on a regular basis . Regulation is in third place , most probably as result of the rather charged regulatory pipeline of recent years , which is now showing signs of slowing . At a market level , China-based CFOs expect to have to apply a relatively greater percentage of resources to portfolio performance , while those in the UK see cyber-security as a more demanding area than their peers from other markets in the survey pool .
Options for delivery In aiming to meet perceived client expectations for more frequent data updates while also addressing the requirements resulting from growth of the funds themselves , CFOs have several options ranging from outsourcing and partnering to buying in more technology and expanding the CFO team . Survey results suggest that , as things stand , increased investment in technology and people , or outsourcing more functions , would be the most popular choices . Some 18 % of CFO respondents show some interest in investment in distributed ledger technology as a strategic option . Whatever their choice however , only 11 % of respondents expect their existing balance between in-house resources and outsourcing to be maintained . As CFOs assess these various options , which are not necessarily exclusive , the question arises as to which areas they consider it most urgent to provide with additional resources . In the next three years , survey respondents expect technological expertise to be top of the list – particularly in the US and UK . This is confirmed anecdotally by the growing trend to include coding and software proficiency in advertised job requirements for new hires for financial positions . Plugging that knowledge gap will not , however , be a solution in itself as the more technology allows for streamlined and efficient data outflows , the more investors are likely to realise the information opportunities that these advances have the potential to provide .
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