It’s a truth that real estate investment management firms have long accepted: the more assets you have under management, the higher your headcount. There are a number of reasons for this, but the main sources of headcount growing along with AUM can be seen in four main areas:
- Client servicing. As your AUM grows, you need more resources to service your clients, which most often means adding employees.
- Portfolio management. The higher the AUM, the more people you need to manage those additional assets.
- Compliance. Keeping up to date with regulations and best practices often means adding to your headcount to monitor changes, ensure proper documentation, and maintain audit trails.
- Business development. You may need to devote more resources to not only attracting new clients, but also retaining existing clients.
Depending on the complexity of each new client’s rent rolls, trial balances, loans, investor requirements, and more, you may need to add headcount in multiple of these areas. And unfortunately, there has never been a better way for the industry to address these needs than to simply throw bodies at them. Until now, that is.
There’s a Better Way
The biggest culprit behind the link between AUM and headcount is inefficiency – in the way data is collected, the way reports are generated, etc. And much of this comes down to investment firms needing to manually gather data from multiple disparate sources and collate it before any analysis can take place – and before any management decisions can be made. Under traditional models, it’s no wonder AUM and headcount have been so inextricably linked for so long.
But it doesn’t have to be so complicated thanks to better data management and automation. When you can automatically find and retrieve the data you need when you need it, you can eliminate the need for human intervention to perform many of the tasks associated with real estate asset management.
With automation, you can quickly generate reports at the touch of a button. This allows you to not only make better business decisions but also grow your AUM without growing headcount proportionally. For example, Pereview clients have been able to grow their AUM while adding less than 25 percent headcount.
How it Works
When all your data is available in a single location, regardless of where it was originally generated, you no longer need to search for the data you need to manage assets. Better still, you can automate reporting – including custom reporting – allowing you to perform your analysis your way, whether that means automating annual business plans, reporting actuals to underwriting, budgeting, tracking occupancy and other trends, and much more.
With automation, this reporting happens instantly, with no need to add employees at the rates previously seen with traditional asset management. By eliminating much of the human error associated with data entry, you also have greater confidence in your decision-making knowing you have the most accurate, up-to-date data at your disposal.
While the bond between AUM and headcount has long been “the way things are done,” that’s no longer the case. With Pereview, you can grow without incurring the traditional expense of adding more employees to simply keep up – and as a bonus, you get faster, more accurate reporting that allows you to make better business decisions.
It’s time to break this vicious cycle and embrace a technology that can allow you to grow your bottom line without the traditional cost increases.