Asset managers need to adopt more integrated approaches to remain successful in the future, according to a recent paper from the Thinking Ahead Institute and the CAIA Association.
The report suggested the traditional approach, built around benchmark-relative returns, has become less relevant in a market defined by interconnected risk and rising demands.
While some large asset owners, including sovereign wealth funds, are adopting more integrated approaches, the report found many other firms are not yet able to respond in these integrated ways.
Marisa Hall, head of the Thinking Ahead Institute, said: “Asset management is running out of road with old playbooks.
“In a world shaped by interconnected risks, structural change and rising client demands, benchmark-relative thinking alone is no longer enough”
In the era of a more integrated market environment, the Thinking Ahead Institute and CAIA argued investment leaders need to rethink their approaches to ensure their fit for purpose.
Thinking Ahead Institute’s Hall added: “Too many asset managers are still clinging to models built for a simpler era.”
John Bowman, CEO of the CAIA, said: “Geopolitical fragmentation, technological disruption, demographic shifts, and the growing convergence of public and private markets require a broader lens that can connect dots across several disciplines.”
Similarly, firms are not investing as aggressively in AI as initial perceptions may suggest, according to the research. Over the next five years, most firms will only marginally increase tech spending, as they try to balance AI with human talent and governance, they found.
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