Breaking into the market as an emerging manager is more challenging than ever. The barriers to entry are high, capital raising is difficult and investor expectations are evolving. These themes were central to the discussion at the recent With Intelligence Emerging Managers Summit, where Centralis Chief Commercial Officer Elizabeth Fitzgibbons-Butler joined a panel on ‘The Ten-Year Plan: Prepping for Scalable Operational Infrastructure’.
The session focused on how boutique and emerging managers can build resilient operational structures that support long-term growth while maintaining efficiency and compliance. One key takeaway was that while outsourcing has always played a role in fund operations, today’s managers need a strategic, scalable approach to outsourcing that balances cost, efficiency and control.
The evolving role of the COO: From operations to alpha generation
As emerging managers scale, the role of the COO has become more than just operational oversight – it is now a driver of alpha. Streamlining middle and back-office functions allows managers to focus on core activities such as investment strategy and investor relations. The challenge lies in deciding which functions to keep in-house and which to outsource, a decision that evolves as firms grow.
For emerging managers without a spin-out pedigree, the focus is on building a track record and brand reputation. In these early stages, it makes sense to retain investor relations (IR) and marketing in-house while outsourcing non-core functions such as middle office, legal, regulatory reporting and fund administration.
As firms scale, the COO must reassess their outsourcing model. Should they opt for a comprehensive, fully outsourced approach, or would a best-of-breed model – selecting specialised providers for different functions – offer greater flexibility? The decision must consider factors beyond just cost, such as cultural fit, service quality and long-term adaptability.
The due diligence imperative: Selecting and managing service providers
Another critical discussion point was the importance of thorough due diligence in selecting outsourcing partners. Investors are scrutinising operational processes more than ever, making the operational due diligence (ODD) process a key concern for emerging managers.
Choosing the right service providers requires more than just negotiating competitive fees – it involves a rigorous assessment of capabilities, technology infrastructure, regulatory expertise and ongoing service quality. Maintaining an open dialogue with outsourced partners ensures managers stay ahead of regulatory changes, IT advancements and industry best practices.
Outsourcing as a scalable growth enabler
The consensus from the panel was clear: outsourcing is no longer just a cost-saving measure – it is a strategic necessity for scalability. Emerging managers who embrace a well-structured outsourcing model gain a competitive edge by remaining lean and agile, reducing operational risk and meeting investor expectations for robust infrastructure.
At Centralis Group, we support boutique and emerging managers in navigating this complex landscape, providing tailored outsourced and co-sourced solutions that align with each firm’s growth trajectory. With expertise in fund services, governance, risk management and regulatory reporting, we enable managers to focus on investment performance while maintaining an institutional-quality operational framework.
In a market where scale and efficiency are critical, outsourcing isn’t just an operational choice – it’s a strategic one. By making informed outsourcing decisions early, emerging managers can build a resilient infrastructure that supports sustainable growth for years to come.
To find out more about the Centralis model of out-sourcing/ co-sourcing read our article on co-sourcing and the future of fund administration here.