In a rapidly evolving asset management industry, artificial intelligence (AI) has dominated discussions among industry professionals, according to the latest Index Industry Association (IIA) member survey. However, beyond AI, other pressing topics like sustainable investing, thematic investing, and customized investment solutions have also captured the attention of asset managers in Europe and America.
The changing landscape of the asset management industry indicates a need for new partnerships, specialized information sources, enhanced skills, and stronger ecosystems and alliances. This shift underscores the complexity and challenges faced by asset managers striving to navigate this dynamic environment.
##Background
For the past four years, the IIA has conducted an annual survey in collaboration with member firms and Opinium Research. This survey engages with 300 chief investment officers, portfolio managers, and chief financial officers across a broad spectrum of investment providers in the US and Europe. The goal of this initiative is to assess how asset managers perceive progress against current challenges, identify opportunities, and analyze key factors shaping the industry’s long-term evolution.
Initially focused on environmental, social, and governance (ESG)-related indexes, the survey evolved over time to encompass a broader scope of topics reflecting the industry’s needs. The 2024 survey expanded beyond ESG and sustainable investing to capture the myriad drivers and trends influencing asset managers. These findings revealed a deeper understanding of the challenges, opportunities, hopes, and concerns facing the industry.
##Factors Impacting Investment Performance
- Over the next 12 months, asset managers are closely monitoring macroeconomic factors such as interest rates, inflation, and potential economic slowdowns as primary determinants of investment performance.
- Notably, 81% of US respondents identified interest rates and inflation as critical issues.
##Trends Shaping Asset Management
- AI emerged as a significant focus for asset managers in the past year, surpassing sustainable investing in terms of importance. Other technological trends like tokenization and blockchain garnered less attention.
- Managers also emphasized thematic investing and customized products, with a smaller subset considering discussions around crypto products and the integration of private markets.
##Generative AI: Transforming Asset Management
Expanding the survey’s scope allowed for valuable insights into AI and its implications for asset managers, highlighting its potential as a game-changer in the industry.
##ESG and Sustainable Investing
- While ESG remains pivotal in asset managers’ strategies, expectations for exponential growth have tempered over time.
- Environmental considerations continue to be a top priority for investors in the sustainability realm.
##Challenges in Private Markets
- Private markets present both opportunities and obstacles for asset managers, with concerns ranging from integrating private equity into investment portfolios to liquidity issues and data gaps.
- The slow development of global indexes capturing private equity market data contributes to these challenges.
##Index Providers’ Role
- Asset managers view sustainable investing, direct indexing, thematic investing, and customized investment solutions as key areas for partnership with index providers.
- The survey highlights the growing importance of index providers and their services, with over half of respondents anticipating increased reliance on index providers for success in the coming year.
The survey findings offer a glimpse into the evolving landscape of asset management, underscored by the industry’s shifting priorities and challenges. For a more in-depth exploration of this year’s results, we encourage further examination and welcome feedback and suggestions for future research.
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