EUROPE - Business model alignment with Ucits IV will compel companies to improve their operating models, Ernst &Young said.
In a survey of 98 European investment funds, 49% said business model alignment with Ucits IV - Undertaking for Collective Investment in Transferable Securities IV directive - is the biggest driver for improving their operating models.
This compared with 37% that identified cost efficiency as the biggest driver.
However, the survey revealed Ucits IV is not bringing the operational cost reductions many European investment fund asset managers assumed.
Ernst & Young Ucits IV leader Crispin Rolt said: "The focus has turned to using Ucits IV to optimise the operating model and fund ranges, to align better with the business strategy of the organisation."
The survey showed managers realised cost reduction is not the biggest driver for Ucits IV, as around 43% identified operation efficiency as their top driver to optimise their fund range.
This compares with 29% that said cost reduction was the most important driver and 28% believed this to be distribution benefits.
Rolt said: "Operational efficiency is a key feature of Ucits IV and it will bring benefits to managers through a more scalable fund range.
Changes under the directive will improve distribution opportunities, bringing speedier entry into new markets and that should be the leading driver for managers distributing products cross border."
The implementation deadline for Ucits IV is July 2011, however the survey showed a fifth of funds have not started work in this area.
Less than a third have already started work on implementation , either by appointing a steering committee or conducting high level analysis.
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