Benchmarking Control of Delegated Functions
The significance of delegation is increasing in the financial sector, in particular for the fund management companies. Comparison of fund management companies - How do leading fund management companies in Switzerland control their delegated functions?
Tschanz Anja & Kanthan Kirthana, 2020
Bachelor Thesis, Credit Suisse Funds AG
Betreuende Dozierende: Maximilian Koch
Keywords: Oversight, Due Diligence, Delegation
Fund management companies delegate a wide range of tasks, however they remain the responsible entity for the delegated functions. The focus of this research lies in the functions portfolio management, distribution, custody bank and fund administration. It is assumed that fund management companies use different oversight and due diligence concpets. The aim of this paper is to analyse the existing ones and to discover if there is a best-in-class approach to monitor the delegated functions.
Parameters to be compared: Control processes, resource requirements, optimization possibilities, etc.
Structured questionnaires for expert interviews built the base. Existing control process at Credit Suisse Funds AG was analysed. Then, interviews with UBS Fund Management AG and Swisscanto Fondsleitung AG were conducted. The results were standardized and compared. A conceptual view of the consultancy firm, Primecoach AG was included. Key concepts from authorities were used as guidance in the monitoring landscape. Further, data about legislative changes were assessed. Lastly, the conclusion was drawn that answers the question regarding the best-in-class approach of controlling delegations.
Results: This paper shows all differences regarding the controlling of delegated functions. Those differences reach from significant strategic decisions to rather smaller distinctions. Further, the resources used for the monitoring activities were analyzed. It can be said that the need for resources does not only depend on the number of asset managers, partners, or custody banks, but also on other factors. Therefore, it is significant to carefully identify sufficient and skilled resources for the oversight and due diligence of the delegated functions.
Benefits: From the analysis, the monitoring setup of different fund management companies are described and transparency among them was created. Participating fund management companies benefit from comparing the concepts in place of the other player. The varying oversight and due diligence shapes the monitoring landscape. The results can help to implement changes or improvements in the current monitoring concepts applied in the fund management companies following the current standards.
Studiengang: Business Administration International Management (Bachelor)
Fachbereich der Arbeit: Accounting, Banking, Controlling and Finance