Central banks’ policy of engineering market appreciation has shifted to one of slowing growth to combat inflation.With the collapse of a built-in bull market to support revenue growth, preexisting pressures have been exacerbated: The net flow rate of assets also fell below 3% for the first time since 2018, reaching 1.6% of total AuM at the beginning of 2022, or $1.7 trillion. Global AuM fell by $10 trillion, or 10%, to $98 trillion-near 2020 levels. The result was the second-largest single-year decrease in global assets under management (AuM) since 2005. In 2022, however, rapidly rising interest rates caused both stock and bond values to plummet. Market performance has been responsible for 90% of the industry’s revenue growth for nearly two decades.
The asset management industry has reached a turning point that will require rethinking the business model that has served it so well in the past. The leaders who take action now are most likely to survive and thrive in the decade ahead.īy Chris McIntyre, Sultan Alsubaihin, Simon Bartletta, Philip Bianchi, Joe Carrubba, Peter Czerepak, Dean Frankle, Lubasha Heredia, Bingbing Liu, Gleb Margolin, Michele Millosevich, Miftah Mizan, Edoardo Palmisani, Ian Pancham, Neil Pardasani, Kedra Newsom Reeves, George Rudolph, Blaine Slack, Brian Teixeira, and Andrea Walbaum The path to transformation is clear and imminently achievable for most. Implement technologies that make highly personalized client experiences and products, such as direct indexing, possible. Consider entering the alternatives space-which has high-growth opportunities-and offering private market products for retail and institutional investors. Optimize costs throughout the organization, rather than just cut expenses. In an era of market uncertainties, fee compression, rising costs, and technological change, asset managers should transform and build more innovative organizations by pursuing the three Ps: But in 2022, global assets under management fell by 10% to $98 trillion. Technology, Media, and Telecommunicationsįor nearly two decades, strong market performance spurred revenue growth.
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