Rebooting the global asset management industry

Rebooting the global asset management industry 7 Asset managers are caught in the cross hairs as they navigate it . On the upside, opportunities also beckon in the medium term from what is billed as the biggest wealth transfer in history, as the post-war Baby Boomers pass on their wealth to a new generation of investors. Its impact is likely to be felt much sooner, as the transfers are increasingly made within their lifetimes rather than in their wills. Being values- driven, the beneficiaries are more open to asset vehicles that deliver their financial and societal goals based on personal ethics. As if that were not enough, the European Union’s latest initiative encourages savers, thus far relying on conventional bank deposit accounts earning meagre interest, to target better returns by investing in growth companies at the vanguard of climate action, innovation, and wealth creation. Research Issues These threats and opportunities are well known. What is less well known is how the global asset management industry is responding by revamping their operating models and investment strategies. Hence this survey is timely. It performs a stock take by pursuing five questions: • What challenges does the industry face currently and what factors are likely to drive changes in it over the next three years? • How are Artificial Intelligence (AI) and its poster child Generative Artificial Intelligence (GenAI) likely to meet the unique needs of the new generation of investors? • How is the outsourcing of front, middle and back offices changing the operating models and reshaping the industry ecosystem? • What will be the key features of the winning business models – the secret sauce – that will run with the grain of the new needs of the new clients? • What changes in three areas – leadership, culture and talent – are being or will be implemented to underpin the winning models? Research Method These questions were pursued in a survey covering a broad cross-section of 269 asset managers of varying sizes operating in public and private markets based in 26 countries, with a combined AuM of $37.7 trillion (see inside cover page). The survey was followed up by structured interviews with 30 senior executives in the respondent firms. As such, the survey provided the breadth and the interviews the depth. Together they served to offer fresh insights into recent trends and future progress. The rest of this section gives the survey’s highlights, followed by five main findings and the eight themes that support them. “It always seems impossible until it is done.” Nelson Mandela