By Christian Edelmann, Julia Hobart, Kamil Kaczmarski, Joshua Zwick, and Matthias Hübner
This article first appeared in Forbes Middle East on March 8, 2020
Unprecedented fundamental shifts in the industry are proving disruptive for asset managers, many of whom are still catching up to address today’s demands. Asset managers must today make good portfolio investment decisions while steering their businesses through considerable change.
Here are 10 predictions for asset management in 2020.
Capital and balance sheet management enter the lexicon of asset managers
Asset managers may need to think more strategically about managing their balance sheets and capital to show financial strength and weather adverse events including operational or liquidity issues. Asset managers may particularly wish to bolster their financial resources to aggressively seed new products, optimize financing arrangements and pursue strategic growth initiatives.
Climate expertise as a differentiator
Asset managers may integrate climate science expertise into their investment process. Most have worked on ESG but few have developed unique climate science expertise. This could change as the consequences and impact of climate change will hugely shift the market. Asset managers should look to capitalize by incorporating climate science expertise into their investment decisions.
While improving efficiency and cost sustainability are important, asset management is a scale business and, increasingly, a winner-takes-all game
Democratization of private markets
Supply of private market investments could extend to retail investors. Retail investors have not had the same opportunities to invest in private markets, but there is a strong case for broadening the investment net with appropriate guidance.
The full article continues in Forbes.