Rebooting the global asset management industry

Rebooting the global asset management industry 11 4. W inning business models will combine the best of old and new Alongside the recalibration of the value chain, industry consolidation will continue. Yet, the demand for alpha returns will likely remain insatiable. Thus, alpha–beta barbelling will continue to bifurcate the asset industry. At one end will be mega players offering low-cost passive funds and active funds with acceptable levels of returns. At the other end will be specialist niche players with a deep talent pool and cutting- edge technology to deliver market-beating returns and client experience. They may remain independent by bootstrapping their way to prominence; or be stand-alone boutiques within larger players. Two distinct offerings will differentiatewinners from losers in the era of wealth transfer. Onewill do old things better by avoiding aggressive product push and address their clients’ unique needs within personalized portfolios backed by close client engagement, strong alignment of interests and deep investment expertise. The other offeringwill deploy digital platforms that democratize private markets or offer diversity of strategies within a singlewrapper or direct access to clients (D2C). Such platforms will continue tomark a radical departure fromhow things are done currently. More details in Themes 6 & 7 5. L eadership, culture and talent are seen as the linchpin of success In the asset management industry, a raft of measures are now in progress – or will be set in motion over the next three years. It is also recognized that the genius of a strategy is not in design but in its savvy execution – that proverbial magic bullet. Hence, strategic actions are overlaid by efforts in three areas. The first seeks to develop forward thinking results-oriented leaders who have set a credible vision around wealth transfer, have a strong can- domindset and the social skills to get buy-in from all stakeholders. Leaders make all the difference. The second seeks to reshape business cultures by putting client interests above all else and find newmethods of value creation from technology. The newmantra is ‘fix the culture, and the numbers will follow’. This is in contrast to having mission statements and values pinned on all the office noticeboards. Third. the talent pool is also being reoriented such that humans and machines can complement each other’s strengths while compensating for their respective weaknesses. Thus, the current predicament of the asset management industry is also being seen as a concealed opportunity to create businesses of enduring value. More details in Themes 7 & 8 Two distinct offerings will likely differentiate winners from losers in the era of big wealth transfer. Figure B For the activities that have been outsourced, what have been the outcomes thus far in the three key areas? Source: Citi/CREATE-Research Survey 2025 % of respondents Front office Middle office Back office Too soon to say Fair Good Excellent 12 12 19 5 66 10 9 58 21 9 55 24 “Big will remain beautiful. But alpha shops will also continue to thrive so long as they deliver value. ” “Without mindset shifts, GenAI is just another tool. It requires seeing clients through new lenses. This is a leadership challenge.” Interview Quotes