Optimising Asset Management Operating Models: When to Retain, Co‑Source, Outsource or Use a Lift‑Out

For many asset managers, the story starts with a fully in‑house operating model. The manager hires operations, finance, fund accounting and investor services teams, implements technology and builds processes organically around products and clients. It is familiar, controllable and – at modest scale – efficient enough.

The benefits of an in‑house asset management operating model are clear:

• Institutional knowledge lives in the same organisation as the investment, distribution and client teams.
• Changes can be made quickly, without complex contract negotiations or external dependencies.
• Risk management, compliance and accountability sit inside one governance framework.

As the firm adds new jurisdictions, strategies and investor types, this in‑house model begins to creak.  Capacity becomes unpredictable and harder to adjust. Regulatory change demands more specialist expertise. Talent is stretched between “keeping the lights on” and supporting growth initiatives like new vehicles, new channels and new client segments. The question slowly shifts from “Can our team cope?” to “Is this still the best way to deploy our people and capital?”

The next step is rarely a jump straight to full outsourcing. For many, the more controlled move is co‑sourcing. In a co‑sourced asset management operating model, the manager keeps ownership of key systems, data and decision points, but brings in an external partner to run significant parts of the process alongside them. The operating rhythm is shared, not handed over.

Co‑sourcing is attractive when:

• Critical data needs to remain in the manager’s environment, for example in private markets where deal, investor and exposure information is highly nuanced.
• The manager wants to retain control over approvals, policies and risk decisions, but needs more hands and structured workflows to execute them.
• Internal teams are spending too much time on repeatable tasks that a specialist partner can industrialise, without breaking the existing architecture.

From the manager’s perspective, co‑sourcing feels like adding a highly capable “shadow team” that plugs into existing tools and processes. From the asset servicer’s perspective, it demands fluency in the client’s technology, strong process design skills and a willingness to share responsibility rather than own it outright. Done well, a co‑sourced model buys breathing space: internal staff can focus on higher‑value work – such as new product launches, analytics and client initiatives – while the partner helps stabilise and scale day‑to‑day operations.

As the business grows, some functions become so standardised and high‑volume that the case for full outsourcing becomes compelling. Rather than splitting responsibility, the manager asks an asset servicing partner to run specific processes end‑to‑end on the partner’s own platform, subject to clear service levels and oversight.

This full outsourcing model works best where:

• The activity is repeatable and rules‑based, like core fund accounting, reconciliations, standard financial reporting, regulatory reporting packs or high‑volume investor servicing.
• The provider can demonstrate industrial‑scale controls, automation, resilience and regulatory change management that would be costly to replicate in‑house.
• Speed to market or cost efficiency is critical, and there is limited strategic advantage in building proprietary capabilities.

The narrative changes here. The manager is no longer simply augmenting their team; they are redesigning the asset management operating model around the provider’s strengths. That requires:

• Thoughtful allocation of which processes truly belong in the “outsource” bucket, and which still warrant co‑sourcing or in‑house retention.
• Clear governance: who owns which risks, how performance is measured, and how changes are agreed and implemented.
• A strong data and integration strategy, so outsourced processes do not become new black boxes and data remains accessible across the front, middle and back office.

For many firms, this stage is where operational leverage appears. They can launch more funds on standard platforms, enter new markets using the provider’s footprint, and redirect internal resources to strategy, product and client work. The trade‑off is dependence: the outsourcing provider becomes a core part of the firm’s infrastructure, not an optional bolt‑on.

Some managers reach a point where they have built substantial internal operations – often very capable – but can no longer scale them efficiently. Co‑sourcing and selective outsourcing help at the edges, yet the centre of gravity remains in‑house, consuming leadership time and budget that could be redeployed to growth. This is where an operations lift‑out enters the story.

A lift‑out in asset management is more than a contract; it is a structural move. The manager transfers an existing operations team – and often its processes and sometimes systems – into an asset servicer. That team then continues to run the function, but now within the servicer’s organisation and under a long‑term services agreement back to the manager.

The appeal for managers and operations leaders lies in how a lift‑out blends continuity with transformation:

• The same people who understand the funds, investors, portfolios and nuances continue to do the work, reducing transition risk and protecting institutional knowledge.
• The asset servicer adds scale, tooling, peer learning, automation and a broader control environment around that team.
• Over time, processes and platforms can be rationalised and upgraded within a larger operational ecosystem, rather than rebuilt from scratch in isolation.

For asset servicers, a lift‑out is a commitment as much as an opportunity. They take on not only headcount and workflows, but also the responsibility to evolve them. Success depends on:

• Preserving what works on Day 1 – team structures, service levels and relationship touchpoints – so clients and investors experience stability through the transition.
• Gradually integrating data and processes into a unified platform, with clear roadmaps for automation, harmonisation and control upgrades.
• Providing transparency through dashboards, SLAs and joint governance so the manager can see measurable improvements in efficiency, risk metrics and capacity over time.

In the wider operating‑model story, lift‑outs often sit at the intersection of co‑sourcing and outsourcing. They can feel like an advanced form of co‑sourcing at first – the “old” team remains tightly connected to the manager’s way of working – but structurally they anchor a long‑term outsourcing relationship built on a shared foundation.

Viewed as a whole, the journey from in‑house to co‑sourcing, outsourcing and lift‑outs is not a straight line; it is a toolkit that asset managers can mix and match. Different processes, asset classes and regions may sit at different points on the spectrum at any time. What matters is intentional operating‑model design.

Retain in‑house where activities define your firm’s edge or require tight proximity to investment and client decisions.

Co‑source asset management operations where you want to maintain control over systems and policies, but need specialist capacity, global coverage and execution discipline.

Outsource asset management processes where scale, standardisation and regulatory complexity favour industrial platforms over bespoke in‑house builds.

Consider an operations lift‑out when you have a strong internal function that has become hard to scale, and you want to turn it into a partnership asset rather than dismantle it.

For asset managers, this journey leads to an operating model that grows with the business rather than holding it back. For asset servicers, it elevates their role from task‑taker to architect and co‑author of the operating model – helping clients decide not only how to execute today’s work, but how to design an asset management operating ecosystem that will still fit when tomorrow’s chapter arrives.

About the author 

Rosemary McCollin is Executive Vice President for Vistra Fund Solutions across the UK, Europe and the Middle East. With more than 20 years in fund services, she has delivered complex client projects across multiple jurisdictions and leads a high performing regional team.

Rosie is recognised for her practical leadership and her focus on bespoke, cross border solutions that combine local insight with global expertise. Her work continues to strengthen Vistra’s position as a trusted partner for managers operating in complex fund environments.