Bringing you live news and features since 2013
Bringing you news, views and analysis since 2013
Picture of a crystal ball

26445

Global asset managers’ outlook changes from negative to stable, says Moody’s

RELATED TOPICS​

The outlook for global asset managers has been revised to stable from negative, reflecting an industry adapting to industry challenges alongside rising demand which is supported by broader economic expansion, Moody’s Investors Service says in a new report.

Key drivers of the stable outlook are the emergence of new products that blend features of active and passive management and the use of passive instruments as inputs in active disciplines. There are greater opportunities as well for alternative managers.
 
“Fundamental challenges remain, however,” Neal Epstein, a Moody’s Vice President says. “Actively managed products that are most susceptible to passive substitution look increasingly redundant, and competition with cheaper passive products is driving fees lower across the industry.” In the European Union, MiFID II, which comes into effect in January 2018, pushes for greater transparency of fees and is likely to draw investors to use lower cost funds.
 
Asset managers have responded to these challenges by launching new products. With greater focus on outcomes for investors, products are being designed to address risks across multiple asset classes. Products such as “smart beta” and multi-asset portfolios are designed to balance risk and return opportunities for investors.
 
Intermediaries increasingly employ an advice for fee model, taking holistic approaches towards the management of clients’ wealth, and asset managers’ distribution efforts are becoming more consultative and institutional in character. As a result, asset managers are making new investments in distribution technology and human capital. Technology has also been implemented to capture growth of “roboadvice” and to more closely partner with distributors.
 
Competitive forces have not uniformly translated to financial stress. Fee models have become more adaptive, and cost initiatives have limited margin pressure.
 
Mergers and acquisitions also reflect an industry in flux. Deals between large complementary organisations have fortified their market position. Acquisitions of products in either more defensible or more dynamic industry segments allow acquirers to adapt to change, with potentially less financial risk.
 

Latest News

Pantheon, a specialist global private markets investor, and iCapital, the global fintech platform, have announced..
Data from Houlihan Lokey’s MidCapMonitor showed that UK sponsor-backed financing activity significantly increased YoY in..
Irish domiciled funds surpassed EUR4.3 trillion AuM (Assets under Management) at end-March 2024, a 15..

Related Articles

Global ESG Investing
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of climate change and ESG factors in state policymaking...
On May 15 Florida’s Republican Governor Ron DeSantis signed legislation that furthers his ongoing campaign to oppose the role of..
Trends
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100 million deals announced this month alone...
The trend to buyout among the UK’s smaller defined benefit (DB) schemes continues with a slew of new sub GBP100..
Different flavours
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led, multi-boutique global asset manager with over USD20 billion under management, recently undertook a survey with 204 UK investment professionals, seeking insights into their perceptions and attitudes towards boutique asset managers...
In what is believed to be the first survey of its kind in the UK market, Nedgroup Investments, the investment-led,..
UK map
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be worth billions of pounds in the coming years...
UK local government pension schemes (LGPS) are leading the charge on investment in private markets issuing tenders set to be..
Subscribe to the Institutional Asset Manager newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by