In today’s low-yield environment, institutional investors are keeping a close eye on their portfolio composition, internal capabilities and technology demands, as well as tradeoffs between asset management fees and internal costs. This ongoing review is steering many institutional investors to conclude they can gain higher returns by boosting their direct investments and by increasing their internal capabilities accordingly.
Deciding to build or expand a direct investment program triggers a range of questions, one of the more important being whether to set up one or more satellite offices. There are no one-size-fits-all answers. Every organization has unique characteristics and capabilities, and these must be understood and analyzed to assess the potential benefits and challenges of expanding operations geographically. Investors also need to consider whether expansion is within their means and aligns with their broader goals.
This article explores some of the more important questions to think about when establishing offices closer to key markets.