Celent has released a new report titled Business and IT Trends Impacting the Buy Side. The report was written by Jay Wolstenholme, senior analyst in Celent’s Securities and Investments practice.

The buy side is being challenged by a confluence of macroeconomic factors that have significantly influenced investment allocation decisions such as overlaying alpha on top of low-cost passive indexing, smart beta, LDI, ALM, and alternative assets, to name a few. In turn these new investment directives have catalyzed a revamping of operations and technology in order to effect and manage the new investments.

Underneath the covers, legacy operations and technology can’t efficiently, safely handle the stretch of these new multi-asset investments, right from portfolio construction through trading to portfolio management. Regulation, investment committees, and audit and client demands have all now increased the table stakes. Asset owners will move their money to the asset managers that can provide a wider range of investments, along with transparency, superior service, and auditable operations.

This report examines the major trends that are redirecting the course of buy side investing and the front-to-back operations and systems needed to optimally run the business.

The buy side is shifting rapidly. Well, maybe not rapidly — but the ocean liner is definitely turning. “The term disruption is overused, but it does seem that a perfect storm of events is hitting the buy side, and significant transformation is afoot,” comments Wolstenholme.