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Asset managers resigned to lower growth prospects

State Street’s findings follow an earlier Expert Investor Survey among asset managers that showed a consensus for the asset management industry to become less profitable over the next three years.

Three quarters of asset manager respondents to State Street’s survey expect the rise of passive investments to result in lower growth, leading to continued M&A activity in the sector. Two thirds of asset managers also think there will be a drive to merge funds in order to save costs.

Foreign sales push

In response to increasing growth constraints, a third of asset managers is planning to enter new country markets, a strategy also pursued by three in 10 insurance companies.

Asset managers would also do well to consider widening their expertise to new asset classes, such as absolute return strategies. “Increasing investments in new asset classes” is the top priority of asset owners to achieve their own growth objectives, according to State Street’s survey.

Part of the Bonhill Group.