Digital Banking Products For Asset Managers

Executive Summary / Key Takeaways

• Fragmented bank relationships, a plethora of operational accounts, communication inefficiencies, and a lack of sophisticated treasury management tools burden mid-market asset management firms that manage between $100M and $2B in assets.
  
• Hudson simplifies contractual payments and treasury management by consolidating complex transaction flows into a single, intelligent platform.
  
• By reducing operational risk, enhancing visibility, and improving efficiency, Hudson empowers asset managers to focus on generating alpha and allocating capital—not managing highly manual administrative burden.
  

When Treasury Management Becomes a Tangle

Mid-tier asset managers managing $100M-$2B in assets face a unique operational challenge: they're too sophisticated for basic banking solutions but lack the resources of mega-firms to build custom infrastructure. While the industry celebrates record growth, these managers are caught in an operational squeeze, managing complex investor structures and regulatory requirements alongside fragmented treasury operations that consume valuable resources and limit their growth potential.

This isn't the world of trillion-dollar asset managers with dedicated treasury departments and custom-built infrastructure. Nor is it the simplicity of boutique firms managing a single strategy with basic operational needs. The mid-market asset management firm is likely sophisticated enough to handle complex investment structures, multiple fund vehicles, and institutional investors with demanding operational requirements—but doing it with treasury operations that were designed for a simpler time.

Treasury managers at these companies, who are responsible for ensuring liquidity, minimizing counterparty risk, and maintaining operational efficiency, are often bogged down in reconciling accounts, monitoring cash movements, and chasing down transaction data scattered across different portals. Even those overseeing mid-sized funds face daily operational friction: multiple banking relationships to manage, disparate transaction systems, siloed reporting tools, and the ever-present risk of error in high-value, long-duration transactions.

Consider where your firm likely stands today:

The Multi-Hat Challenge: Your treasury team probably wears multiple hats—they're handling cash management, investor relations support, compliance monitoring, and vendor payments. According to recent industry surveys, 78% of mid-market asset managers report that treasury staff spend less than 40% of their time on strategic treasury management, with the remainder consumed by manual processing and coordination tasks.

The Relationship Juggle: You're likely managing relationships with 3-8 different financial institutions—your prime brokerage, multiple custody banks, many operational accounts, and perhaps specialized lenders or credit facilities. Each relationship brings its own reporting requirements, operational procedures, and integration challenges. Unlike mega-firms that can demand custom solutions, you must adapt your operations to each institution's standard procedures.

The Scaling Pressure: As your AUM grows, your operational complexity doesn't just increase—it compounds. A $200M manager might handle 50 investors across two funds. Scale to $2B, and you’re managing hundreds/thousands of investors across dozens of fund structures, each with unique fee arrangements, distribution preferences, and reporting requirements.

The result? You're spending disproportionate resources on operational activities that don't differentiate your investment capabilities or improve client outcomes. Worse, these operational constraints may be limiting your ability to pursue attractive growth opportunities or launch innovative investment strategies.

In a recent Deloitte survey, 64% of asset management CFOs cited “fragmented operational systems” as one of their top three barriers to efficiency. Meanwhile, McKinsey estimates that institutional investors spend up to 15% of their operating budgets on treasury and back-office processes alone. The inefficiencies add up—not just in terms of cost, but also in lost opportunities.

Hudson was built to solve this problem. By serving as an intelligent partner—not just another vendor—Hudson transforms treasury chaos into clarity, enabling asset managers to reclaim their time and sharpen their focus where it matters most: making informed, intelligent investment decisions.

Hudson’s Role as a Strategic Ally

Hudson doesn’t just replace legacy processes with software—it works with banks to reimagine the treasury function as a single, intelligent layer across traditionally fragmented bank accounts and infrastructure.

Consolidation Without Compromise

Hudson consolidates multi-bank, multi-account relationships into a single, streamlined solution. We create a control plane: a unified layer where treasury managers gain visibility, orchestrate transactions, and enforce compliance.

Risk Reduction Through Smart Infrastructure

By embedding SOC2-compliant processes and adhering to state money transmission requirements, Hudson ensures every transaction aligns with the highest standards of operational integrity. Built-in controls reduce fraud exposure and counterparty risk.

Efficiency Through Automation

Routine reconciliations, audit reporting, and transaction monitoring are fully automated. According to McKinsey, firms that adopt intelligent treasury automation reduce back-office costs by up to 40% while also significantly reducing settlement times.

Visibility That Enables Strategy

Hudson provides asset managers with a real-time, consolidated view of liquidity, payables, and receivables—across all accounts and geographies. This is not simply about “knowing your cash position.” It’s about empowering strategic capital allocation decisions with clarity and confidence.

Real World Transformation: How Mid-Tier Managers Win

To understand the practical impact of Hudson’s modern treasury solutions, let's consider the transformation that occurs when mid-tier asset managers consolidate their operational complexity.

Case Study: $750M Multi-Strategy Manager

A typical mid-tier manager with $750M across three fund strategies faced common operational challenges:

The Problem: The team manages seven different banking relationships, with manual monthly fee calculations taking 3-4 days per fund, and investor reporting requiring data compilation from six different systems. The treasury team spends 65% of its time on manual processing, limiting its ability to focus on cash optimization, investor service, and strategic planning.

The Solution: Implementation of an integrated treasury platform that consolidated:

• Accounts across multiple banks into a single virtual accounts ledger
• Payment processing across all bank relationships through a unified set of rules 
• Automated fee calculations based on fund documentation and performance data
• Integrated investor reporting combining financial data, performance metrics, and operational updates
• Real-time compliance monitoring across all operational activities

The Results:

• Operational Efficiency: Monthly close processes reduced from 8 days to 2 days
• Cost Reduction: 28% reduction in operational overhead through automation and consolidation
• Strategic Capacity: The treasury team now spends the majority of its time on analysis, optimization, and strategic support
• Growth Enablement: Launched two additional fund strategies without proportional increases in operational staff

Case Study: Private Credit Manager

A $1.2B private credit manager learns how modern technology platforms can handle complex operational requirements.

Complex Requirements:

• Quarterly distribution calculations across 40+ institutional investors
• Multiple fee structures, including management fees, incentive fees, and expense allocations
• Regulatory reporting requirements across multiple jurisdictions
• Escrow management for deal-related transactions and settlements

Platform Solution:

• Automated Distribution Calculations: The system automatically calculates distributions based on fund documentation, investor preferences, and tax considerations
• Multi-Party Transaction Management: Integrated escrow functionality handles complex deal structures with automated milestone tracking and conditional releases
• Regulatory Compliance Integration: Built-in compliance monitoring ensures all activities meet regulatory requirements while maintaining comprehensive audit trails
• Real-Time Investor Access: Investor portal provides real-time access to account information, distribution schedules, and performance reporting

Business Impact:

• Investor Satisfaction: Improved investor experience through real-time transparency and faster distribution processing
• Risk Reduction: Eliminated manual calculation errors and improved regulatory compliance documentation
• Strategic Focus: The Management team can focus on deal sourcing and portfolio management rather than operational coordination

The Future of Treasury Management

The next decade will bring even greater complexity, including tokenized assets, faster settlement rails, and increased regulatory scrutiny. Treasury managers cannot afford to remain reactive.

Forward-looking firms are adopting platforms like Hudson not just for today’s efficiencies but for future resilience. With Hudson as a strategic partner, asset managers position themselves to thrive amid evolving capital markets.

A Thoughtful Ally for Asset Managers

Treasury management should not be a drag on investment performance. It should be an intelligent foundation that empowers growth.

Hudson is more than a vendor—it’s a trusted ally. By consolidating fragmented banking relationships, automating operational bottlenecks, and providing the clarity asset managers crave, Hudson enables firms to focus on what they do best: deploying capital, managing risk, and generating returns.

Get In Touch

If your treasury team is ready to move from complexity to clarity, explore how Hudson can help streamline your operations. Connect with us to see how our intelligent platform empowers asset managers to operate with confidence, efficiency, and strategic focus.