We set out ten predictions for the themes that would impact the asset management industry in 2018.
Events have been especially unpredictable recently. Nevertheless, we have again set ourselves the challenge of predicting the 10 themes that will affect the asset management industry in the coming year. We aim to be right, of course, but also provocative enough to stimulate your thinking. We hope you enjoy the read.
- European regulation goes global, with regulations in the US loosening under Trump and tightening in Europe.
- The rise of illiquid alternatives to capture non-correlated returns and the illiquidity premium.
- Serious impact. The next wave of ESG will be in impact investing, measured by societal and environmental impact and by investment returns.
- Novel pricing. Price compression continues and fee structures are changing to better reflect client interests and value added.
- Cheaper, clearer alpha. Managers with in-demand, capacity-constrained strategies will be able to hold their ground on pricing, while those without them will need to cut fees even further.
- The rise of the OCIO. Asset Managers can become OCIO themselves with advisory and manager selection skills and different governance approach.
- Distribution revolution. On the retail side, investment platforms, vertically integrated advisors and turn-key asset management platforms have been increasing their market share.
- Digital reimagining. Most Asset Managers have been dipping their toes in the digital water, with stakes in robo-advisors and experimentation with artificial intelligence and machine learning.
- Workforce of the future. As machines continue to take over more tasks that were the exclusive domain of humans, firms will begin changing their workforces.
- Tech play. We expect activity in 2018 to be led by tech firms. They bring technology know-how and ideas about how technology can drive business strategy
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