asset managers face battlefield state street

A new global survey by State Street revealed that asset managers believe that new strategies are needed.

asset managers face battlefield state street


In the survey, the firm questioned more than 2,000 senior executives on the future of the investment industry, using data from April and May 2014. 
But asset managers also expressed a significantly optimistic outlook as 51% believed growth will be strongly positive over the next 12 months.
Opinion centred on multi-asset solutions as the new frontier of growth. The survey revealed that 67% believed multi-asset solutions are the investment strategy that will contribute most to business growth over the next three years. By contrast, only 17% backed traditionally actively managed equity and 7% believed traditionally actively managed fixed income would drive growth.
These figures suggest that new investor needs are rewriting the rules of asset management, according to State Street.
However, when asked how prepared asset managers are to tackle the changing investment environment, survey respondents acknowledged a capability gap. A significant 74% believed that few asset managers are currently equipped to thrive when offering multi-asset solutions. 
On the issue of developing strategies for growth, 48% of survey respondents believed that new products for existing country markets offered the greatest growth opportunity. This was followed by 24% who believed growth could be achieved by growing the market share of existing products within existing country markets. Lastly, 20% advocated bringing existing products to new country markets.
The survey also highlighted subtle differences in opinion between European and US managers. While European managers were keen on developing new products, their North American counterparts preferred to focus on existing products. This opinion reflects the status quo of product offering in these geographic regions. In Europe, investors are able to buy into over 35,000 mutual funds encompassing €6trn, compared to the US which offers 7,000 mutual funds worth $15trn. 
“These findings ask the question of whether there are too many products in Europe,” Andrew Wilson, head of asset manager solutions UK, remarked at the survey press briefing.
Managers globally agreed that the number one challenge they are facing is regulatory barriers when expending into new markets, according to 85% respondents. 
Commenting on how State Street is preparing itself for the challenges revealed in the research, Wilson said that building internal expertise is a top challenge, together with developing skills and capabilities.
“Our role in this changing environment is to think more broadly how it will affect clients. We launched our sector solutions role a year ago with the specific aim of aligning the needs of our clients. These clients are asset managers, as well as asset owners such as banks, insurance companies, pension providers along with institutions,” Wilson said. 



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