Behind the Returns: Why Governance Has Become the Real Test
Ask a fund manager what drives performance and they’ll likely talk about strategy; portfolio design, allocations, risk-adjusted returns. Yet as markets grow more complex, it’s increasingly clear that structure, not just skill, separates resilience from risk.
Recent analysis by KPMG and Frontier Advisors found that 68% of asset owners believe poor investment governance can reduce returns by more than 1% per year. Governance failures don’t just damage reputation. They cost performance.
And while much of the current commentary targets the superannuation sector, the implications reach further. Investors expect every fund, regardless of size or strategy, to demonstrate that its structures, reporting and oversight are as robust as its investment thesis.
Rising Expectations Across the Market
Super trustees may be in the spotlight, but the underlying message applies across the financial landscape.
Across markets, governance now sits alongside return as a measure of performance. Even in listed environments, investors are beginning to penalise governance failures directly. During the latest proxy season, directors who chaired governance committees received notably higher dissenting votes from shareholders, a sign that oversight is no longer a backroom issue but a visible measure of confidence. (AllianceBernstein, Governance Matters: Don’t Overlook Board Oversight)
Performance today includes how well a fund manages itself, not only how it manages capital.
For wholesale and private funds, that shift in expectation plays out most clearly in how operations are structured. Decisions about what to build in-house and what to outsource aren’t just efficiency choices, they signal to investors how seriously a manager treats governance, accuracy and accountability.
Case in Point: Building Structure from Day One
Many of Wicklow’s clients operate with lean administrative setups, not as a limitation, but by design. Their principals focus on investment and investor relationships, while Wicklow provides the operational framework that ensures their structure can scale safely.
One fund we supported chose to outsource its registry function from inception, not because it lacked capability but because it recognised the value of embedding institutional discipline early. Adopting Wicklow’s registry framework provided professional-grade infrastructure without the cost base of a large administrator, giving the fund cleaner data, faster reporting and stronger oversight from the start.
That balance of professional systems without unnecessary complexity is what allows managers to grow with confidence while staying true to their investment focus.
What Governance Beyond Compliance Looks Like
At Wicklow, governance is built into the operating model, not added after the fact.
Real-time visibility that turns registry data into an operational advantage
High-quality, auditable information that strengthens investor confidence
Active oversight and licensing that keep accountability live and continuous
This isn’t governance as paperwork. It’s governance as infrastructure: practical, measurable, and built for scale.
For wholesale and private-market operators, governance has become the next performance test, reinforced by regulators and expected by investors alike.
We see it not as an obligation to meet, but as an advantage to maintain - a foundation that allows our clients to grow with confidence while maintaining the rigour that earns investors’ trust.