A recent survey of 160 European asset managers finds the most important factors driving investment decisions are yields (28%), risk aversion (27%), diversification away from mainstream asset classes (22%) and regulatory complexity/uncertainty (22%).
State Streets new Vision report, featuring independent research carried out in conjunction with the Economist Intelligence Unit, explores the structural changes occurring across the investment value chain as challenging times drive asset managers to redefine their roles and the roles of service providers in an evolving market environment.
The report, titled “The Changing Shape of European Investment Management — Volume 3: Navigating Complexity,” points to the emergence of a new paradigm in Europe in which asset managers must adapt to the radically changing needs of investors in the wake of the financial crisis. This paper also explores other key factors that are shaping Europe’s asset management industry including changing investor needs, widespread regulatory reform and urgent demographic trends.
They survey of asset manager found they are cautious about increasing assets under management, with less than a third expecting to increase AUMs by more than eight percent over the next two years.
Joe Antonellis, vice chairman of State Street and head of its Global Services and Global Markets business for Europe, Middle East, Africa and Asia Pacific commented, “Asset managers are seeking strategies to navigate the new environment and their quest for fresh ideas is driving a significant shift in approach. They are forging new relationships with investors and service providers and the benefits will go to those firms that can deliver innovative outcome-based solutions or genuine alpha. Those managers that cannot will struggle.”
Providing a high level of detailed and quality information to clients is the greatest data management challenge facing asset managers, according to 49% of respondents. Achieving sufficient scale with in-house systems was the second most cited challenge (44%) and providing accurate data to regulators and auditors in a timely fashion was third (33%). Nearly three in 10 asset managers (27%) say internal policies and procedures pose the greatest challenge when trying to quickly bring new products to market, with finding consensus among senior managers cited by 19%.
(JDC)