Stiff competition, more diverse customer demands and new tools changing how managers operate, State Street says
Global asset managers are undergoing a ‘fundamental shift’ in their overall business policy as they seek new growth strategies, invest in new tools such as risk and performance analytics and seek to meet rising investor demand for new multi-asset solutions, according to State Street.
A survey finds 76 percent of global asset managers saying fierce competition and a growing appetite for new types of investment are driving them to adapt to these changes and more to maintain a share of the most profitable customer segments, State Street says in its report ‘Frontline revolution: the new battleground for asset managers’.
The greatest opportunity for growth in asset management over the next 12 months will come from bringing new products to existing markets, according to 48 percent of managers interviewed in the global survey. About 47 percent say they plan to expand by moving into new markets, with more than half of them targeting Asia-Pacific. Forty-two percent aim to grow with new client segments.
‘Emerging from the financial crisis, asset managers have growth in their crosshairs,’ says Joseph Antonellis, vice chairman at State Street, in a press release announcing the results of the survey. ‘Although nearly all of the managers surveyed are optimistic about business growth over the next 12 months, few believe they are well equipped to provide the solutions their clients need. To close the capability gap, the top areas of investment over the next three years will include risk analytics, performance analytics and data integration.’
The study shows 85 percent of global asset managers see regulatory barriers as the top challenge to expanding into new markets, while 55 percent say distribution challenges may also prevent them from expanding into new markets. More than two thirds (67 percent) of the respondents say multi-asset solutions will offer their businesses a major source of growth over the next three years, but 74 percent say asset managers are poorly equipped to provide such solutions.
FT Remark conducted the survey on behalf of State Street, questioning 300 senior executives at asset management firms in April and May this year. Respondents were equally distributed across North America, Europe and Asia-Pacific and each managed at least $5 bn in assets.
