For much of the past decade, location strategy in asset management was treated primarily as a cost exercise. Firms evaluated where work could be performed most efficiently, identified lower-cost labour markets, and built operating models designed to capture those savings. Whether work remained in-house or was outsourced to a third party, the underlying logic was largely the same: if a process could be performed reliably elsewhere at a lower cost, it often made sense to move it. 
That logic has not disappeared, but it has become considerably more complicated. Across the industry, firms are reassessing decisions made during a period when cost reduction was the dominant objective. The growth of private markets, evolving settlement requirements, greater scrutiny of service quality, and the emergence of AI-driven operating models have collectively changed the way organisations think about where work should be performed and how operating functions should be structured.
As a result, many firms are adopting a more nuanced framework: outsource the commoditised, insource the differentiators, and nearshore the complex. The shift reflects a broader recognition that cost is only one variable in a much larger operating model equation.
The main considerations
Today, location decisions are typically shaped by four interrelated considerations: cost, time-zone alignment, access to talent, and regulatory requirements. Rather than optimising around a single factor, firms are evaluating how those considerations interact across different functions, asset classes, and operating requirements.
This is particularly evident in the destinations attracting new investment. As one example, Dublin continues to draw interest from firms expanding fund administration and operational support capabilities. The city offers a deep pool of industry talent, an established financial services ecosystem, and proximity to many of the firms and service providers that support global asset management operations. Across the industry, both asset servicers and alternative asset managers have continued to expand their presence there as firms look for locations that provide operational expertise alongside cost advantages.
Other firms are finding that lower-cost North American locations offer a different set of benefits. Cities such as Charlotte, Jacksonville, and Phoenix provide access to experienced financial services talent while reducing some of the legal, regulatory, and operational complexities that can accompany cross-border operating models. Canada has also emerged as an attractive option for certain functions, particularly those requiring closer alignment with North American investment teams and trading operations while still offering meaningful cost advantages relative to major US financial centres.
What these examples have in common is that they reflect a more targeted approach to location strategy. Firms are becoming more deliberate about matching specific types of work to specific operating environments rather than applying a single model across the organisation.
Private markets more relevant than ever
The growing importance of private markets has reinforced this trend. Traditional offshore operating models were often built around repeatable processes, standardised workflows, and consistent data structures. Those characteristics lend themselves well to many public market activities, particularly where high volumes and established procedures allow work to be executed efficiently across large teams.
Private credit introduces a different set of requirements. Credit agreements often contain bespoke terms, covenant structures, payment provisions, and servicing requirements that demand deeper contextual understanding. Operational teams are frequently required to interpret complex documentation, investigate exceptions, and coordinate across multiple stakeholder groups when issues arise. These activities depend heavily on judgement, institutional knowledge, and close collaboration, making them more difficult to support through highly distributed operating models designed primarily around scale and standardisation.
At the same time, service quality has become a more prominent consideration in operating model decisions. Over the past several years, some service providers pursued aggressive offshoring strategies in pursuit of efficiency gains. In many cases, those decisions delivered meaningful cost savings. In others, asset managers experienced service challenges that prompted providers to reassess the balance between offshore, nearshore, and onshore support models.
The result is that workforce location has become a more significant component of provider diligence. Conversations that once focused primarily on technology platforms, service-level agreements, and operating capabilities now extend to support hours, escalation models, workforce composition, training programmes, and employee retention. Asset managers are paying closer attention to the people supporting their operations and the environments in which those teams work.
The impact of artificial intelligence
The next phase of this evolution will be shaped by AI, although perhaps not in the way many initially expected. As automation capabilities continue to mature, the industry’s focus is shifting from location strategy as a primary cost lever toward operational efficiency through technology. Repetitive and process-driven tasks are likely to become more automated over time, reducing the importance of labour arbitrage for certain functions.
What remains are the activities that require analysis, judgement, investigation, and coordination. Those responsibilities tend to benefit from closer alignment with investment teams, business stakeholders, and decision-makers, particularly when speed and context matter.
In that sense, AI may accelerate some of the trends already underway rather than reverse them. The most significant operating model question may no longer be where work is performed, but whether firms can access the technology, expertise, and organisational capabilities required to support increasingly complex workflows.
The industry spent much of the last decade optimising for cost. The decade ahead is likely to be defined by how effectively firms balance efficiency with complexity, resilience, and service quality. For many asset managers, that is leading to a more sophisticated view of location strategy, one that recognises that different types of work create different operational demands and that the best operating model is rarely built around a single objective.