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Information overload creating legacy issues
The vast amount of information at investors' fingertips "completely changes the cost structure" of the funds management business, according to Dundas Global Investors (Dundas) director Russell Hogan.
"You can get so much information now without ever having to leave your desk. You've got this incredible pipe that's delivering information to you faster than you can consume it," he said.
Six to seven years ago, companies spent considerable resources travelling around the world to visit companies, but a lot of that information is readily available via the Internet - and older fund managers have legacy issues as a result, Hogan said.
"With a team of seven people and an office in Edinburgh … we can do pretty much the same job that 60 people did 10 years ago," he said.
"That just transforms your economics … if you build your firm around the availability of that information then you can have a completely different cost structure from the firms that have been around for years," Hogan said.
Alan McFarlane, who is the chief executive of Dundas as well as its founder, said there is so much information available to fund managers that they simply can't consume it all.
"You can just get sheer overload …You're almost overwhelmed by the amount of opinion and analysis coming your way, and that's a big change from the past," he said.
The challenge can be knowing when enough information has been consumed, McFarlane said.
"There comes a point where you have got sufficient information to make the decision. Then it becomes about judgment," he said.
Dundas is a boutique Scottish fund manager that was established in 2010 by McFarlane. The firm secured an Australian distribution deal with Apostle Asset Management earlier this year.
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