BlackRock is increasingly looking beyond traditional front-office roles by training its staff across the front-, middle- and back-office in order to give its team a full end-to-end picture of the investment process.
Speaking at this year’s InvestOps conference, Lou Rosato, global investment operations strategy and industry engagement at BlackRock, said that he expects there to be “fewer ditch diggers and more cathedral builders” in the future.
“The simple thing to do – which we do – is rotate people into different roles. We’re very proud that we have high performers that go across these different activities and functions,” Rosato commented.
“The traditional path would be going into trading or client facing activities and actually recently we have gone the other way and have brought people from trading and client facing into trading into operations. We are moulding together all of the skillsets. They can see the across the full picture with an end-to-end view. If we’re not end-to-end in the way we think we are, we’re stuck.”
Rosato’s comments echo a trend across asset managers where the role of operations is shifting amidst cultural change and the growing importance of automation, data and artificial intelligence for middle-office workflows.
“In this environment the impact of operations is getting more important,” said James Kearney, head of global investment operations at Vanguard during the same panel. “I really hope that starting in 2020 this is the decade where operations becomes sexy.
“Investment managers have found all the alpha they could find, this is the battleground where you are going to be able to make things better.”
Other speakers at the event had also addressed these issues while speaking as part of separate sessions. Jordan O’Neill, head of operations and treasury at Aspect Capital, said that the classic operations specialist was a “dying breed” at the hedge fund.
“If I look at my team they are more business analysts and process engineers, they need to be able to sit and talk with the technologists,” he said. “What we’ve seen work best is whereby the business user and developer are away in a room.
“We tend to not hire too many operational specialists these days, we look more for generalists with broader skill sets who can lend their hand well to taking a process and condensing it down.”
With technology and data becoming such essential components in the investment operations processes at asset management firms, being able to understand the business alongside the technology is becoming crucial.
Discussing the relationship between the front- and, middle- back-office, Arnaud Zeitoun global head of transformation at BNP Paribas Asset Management, also said the firm was looking to enhance the relationship between the two teams.
“What we’re trying to do is change the relationship between the back/middle and front,” he said. “There used to be that whatever the front wanted they get, but the more you dig into that you see the issues it causes throughout the organisation.
“The more you can reverse the relationship and have ops teams lead the framework in which the front-office can function smoothly is very efficient.”