Outsourcing with purpose: building the operating model for growth

Des Fullam Chief Regulatory and Client Solutions Officer

For asset managers, the case for outsourcing is changing. A core part of the operating model for many firms, outsourcing comes into its own particularly where specialist expertise or economies of scale make it more efficient to work with a third party. But as the industry becomes more complex, the question is no longer simply what can be outsourced. It is what should be outsourced – and how the right external partnerships can strengthen a manager’s ability to grow.

Our Change 2026 research pointed to a decisive shift. Seventy per cent of fund managers surveyed expect to increase their use of third-party service providers over the next 12 months, while 96% expect their use of third parties to increase over the next five years. The drivers are equally telling: difficulty recruiting the right talent, growing regulatory demands and the increasing complexity of operating across jurisdictions are all putting pressure on firms’ internal capacity. These pressures are not going away. If anything, they are becoming structural.

Complexity is changing the calculation

Asset managers are facing growing demands, across more markets, under greater scrutiny. They need to launch new products, reach new investors and navigate increasingly complex regulatory requirements – while maintaining high standards of governance and controlling costs. The scale of the regulatory challenge is significant: 89% of managers surveyed expect navigating regulatory complexity to become harder over the next two years, while 21% identified the growing burden of regulation as the leading reason for increasing their use of third-party providers.

At the same time, the expertise required to support these activities is becoming harder to build and maintain in-house. Difficulty recruiting appropriate staff was identified by 35% of managers as the leading reason for increasing their use of third-party providers, reinforcing the pressure on firms to reconsider which capabilities they need to maintain internally.

Building every capability internally may appear to offer greater control, but it also means carrying the cost of maintaining specialist teams, technology and infrastructure – whether or not those resources are being used to their full potential. It can also make it harder to respond quickly when requirements change or a new opportunity emerges. This is why the decision to outsource increasingly needs to be viewed through a strategic as well as an operational lens: the right third-party partner can provide greater resilience, flexibility and scale while helping managers to reduce the operational and regulatory risks that come with trying to do everything themselves.

From cost-saving to strategic capability

Perhaps the clearest sign of this shift is that cost is no longer the defining measure of value. Just 13% of managers in the research cited cost or price as the primary reason they would switch third-party providers. A wider range of services, higher service levels and better technology ranked more highly. That tells us something important about how managers are thinking about outsourcing. The best partnerships are not those that simply perform a task for less. They are those that bring capabilities a manager would struggle to build or sustain alone.

That might mean specialist regulatory expertise, technology and infrastructure that can support multiple jurisdictions, or the ability to launch a new product more quickly without taking on the full cost and complexity of building the necessary capabilities internally.

In other words, outsourcing is increasingly about capacity and capability, not just cost. That distinction is important because it changes the role a third-party provider can play in the business – from delivering a defined function to helping a manager respond to change, pursue new opportunities and manage complexity more effectively.

The management company as a growth enabler

This is particularly relevant to the growing role of third-party management companies. The same research found that 93% of managers expect the outsourcing of fund management company requirements to third parties to increase over the next three years. Their motivations are revealing: the ability to launch different products, speed to market, stronger fiduciary management and independence all feature prominently.

This reflects a broader evolution in the role of the ManCo. Managers are no longer looking at third-party ManCos simply to meet regulatory or operational requirements, but as a tool for growth. Used effectively, it can provide part of the infrastructure needed to enter new markets, launch new strategies and strengthen fiduciary management and independence, without first having to build the full regulated infrastructure themselves. For managers looking to expand across jurisdictions, that can avoid the lengthy and costly process of establishing their own regulated entities, helping them bring new products and strategies to market with greater agility.

That matters at a time when firms are pursuing growth across multiple markets and product strategies are becoming more diverse. Managers need to be able to respond to opportunities without allowing operational complexity to dictate the pace of their business. A third-party ManCo can therefore become part of the infrastructure  that enables that growth, rather than simply another layer of oversight around the fund.

The practical implications can be significant. A manager looking to launch an active ETF, for example, may need to navigate a different regulatory and operational framework from its existing fund range. Similarly, a move into semi-liquid private markets products or an LTAF can bring new requirements around product structure, governance, liquidity and distribution. Working with an experienced third-party partner can give managers access to the specialist infrastructure and expertise needed to support these moves, without requiring them to build every new capability internally.

Choosing the right partner matters

Greater reliance on third parties also raises the bar for providers themselves. If outsourcing is becoming more strategic, the relationship cannot be treated as a simple supplier arrangement. Managers need partners who understand their objectives, can adapt as those objectives change and can provide the depth of expertise, technology and infrastructure needed to support them.

The market is also becoming more fluid. One in five managers surveyed expects to switch to an alternative third-party provider within the next year, with the ability to offer a wider range of services, higher service levels and better technological capabilities ranking ahead of price as potential triggers for switching. That suggests managers are becoming more discerning about the role they expect their providers to play and the value they need those relationships to deliver.

That is a positive development, because outsourcing should not mean giving up control; it should mean being more deliberate about where control and expertise sit within the operating model.

The shift from operators to orchestrators

As growth ambitions evolve, the emphasis is shifting from whether a capability can be kept in-house,  to whether it needs to be.

There will always be functions where deep internal expertise and ownership are essential. But there are others where specialist partners can provide greater scale, resilience and expertise while freeing internal teams to focus on the activities that differentiate the business. The strategic question is therefore not how much a manager can outsource, but how the combination of internal capabilities and external expertise can create a more resilient and adaptable business.

This is the point at which outsourcing moves beyond an operational decision and becomes part of the strategic architecture of the firm. The industry is reaching a tipping point where increasing regulatory complexity, pressure on costs and the need to drive performance are becoming harder to manage through internal resources alone. For managers that can build the right partnerships around them, specialist third parties can help absorb some of that complexity and risk, freeing internal teams to focus on the activities that matter most – from generating investment performance to building client relationships.

The goal is not to outsource more for the sake of it. It is to build an operating model in which capabilities sit where they can deliver the greatest value, combining internal expertise with the technology, infrastructure and specialist knowledge of carefully chosen partners. As the industry becomes more complex, the quality of that third-party ecosystem is likely to become an increasingly important part of competitive advantage – alongside, rather than separate from, the quality of the investment proposition itself.

As Europe’s largest independent third-party ManCo, Carne works with asset managers to provide the regulatory expertise, governance and infrastructure they need to launch, operate and grow across markets. Talk to us about how a more strategic approach to outsourcing could support your next phase of growth.

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