PineBridge Investments (PineBridge) has surveyed fund buyers at the occasion of the FundForum in Berlin last June on trends and challenges in the asset management industry.
Over a third of the fund buyers who attended FundForum replied to PineBridge’s survey.
The research highlights that 58.2% of the respondents expected to allocate an increasing portion of their assets to active managers in the next five years amid a context of rising volatility and macroeconomic risks. Some 34.3% of the fund buyers surveyed said they have no intention to do so and 7.5% remain unsure.
“We have seen many investors who had been almost entirely allocated to passive strategies now turning more to active. I think there is a growing recognition that the market is becoming driven much more by selection. Yet investors are also becoming more selective with the managers they choose, conducting thorough due diligence and focusing on managers that have proven themselves through market cycles,” notes Anik Sen, global head of Equities at PineBridge.
Regarding challenges, fund buyers who answered the survey crowned regulation at 47.9% as challenge number one to their organisation over the five next years, far before digitalisation (16.7%) and manager selection (10.4%).
Artificial intelligence is viewed by 42.3% of the respondents as the biggest tech opportunity followed by automation.
Though, Hani Redha, multi-asset portfolio manager at PineBridge, argues that “although there will be some progress in AI over the next five years, true cognitive recognition and the ability to drive decisions using AI is more than five years away. Automation of processes is where the technology is and will be for the next five years.”
Another finding of the survey shows a rise in ESG considerations by fund buyers given 91% of the respondents are convinced ESG will become more important for investors over the five next years.
Read the study here.