Rebooting the global asset management industry

4 Rebooting the global asset management industry The asset management industry stands at a crossroads – traditional pressures are certainly not abating, whilst at the same time new growth vectors (and technologies) seem likely to only widen the gap between those with the capacity to respond and those without. In this pivotal moment, Citi is proud to support CREATE-Research in producing this study, which captures the perspectives of important asset managers globally. As a long-standing service provider to the asset management industry, Citi has had a front-row seat to the forces reshaping the sector: fee compression, the rise of Exchange-Traded Funds (ETFs) (passive, but increasingly active), operational cost pressures, and the growing expectation for personalized, tech- enabled client experiences. What this report confirms is that many asset managers are responding to these challenges not with retreat, but with reinvention. We are particularly encouraged by the growing recognition that outsourcing is no longer just about efficiency – it’s about enablement. By putting investment where it creates most enterprise value (e.g. portfolio management and distribution) and delegating non-core functions, asset managers are freeing themselves to focus on what appears to truly differentiate: investment performance, client engagement, and with growing importance, innovation. While adoption is still in its early stages, it is clear that new technologies hold immense promise – both as a cost reducer and a value creator. For service providers like Citi, this means not only building and investing in the right technology platforms, but also offering our clients a roadmap to innovation that balances ambition with prudence. We are grateful to Professor Amin Rajan and the CREATE-Research team for their rigorous analysis and for continuing to provoke critical conversations about the future of asset management. At Citi, we remain committed to walking this path alongside our clients – enabling transformation, embracing innovation, and building the resilient and forward-thinking operating models of tomorrow. Chris Cox Global Head of Investor Services Citi Foreword