2020 investment management outlook
Crossing boundaries for profitable growth
For investment managers, 2020 is a year to cross boundaries: embracing new ways of operating and new technology to achieve growth, improve efficiencies and enhance client experience. This article explores the outlook for investment management in the coming year, highlighting the ways that firms can realise growth and transform their operations to ensure long-term success.
The changes facing many investment management firms are significant. Internally, long-standing operating models may need transformation to keep up with the competition, and digital-enabled customisation is becoming a client expectation. Externally, firms may discover finding investors in new demographic segments or geographies is the most effective path to asset growth. Investors are adjusting their portfolio allocations in search of total return. In the retail market, this adjustment includes an expanding eye toward alternative investments.
In 2020, many investment management firms are highly motivated to cross boundaries in search of profitable growth. Crossing boundaries often means leaving the comfort zone and performing new activities or doing standard activities in dramatically new ways. Success can be found crossing boundaries with purpose: by modernising business operations and by upgrading technology infrastructure to reimagine growth, operational efficiencies, and client experiences. All these changes are intended to delight investors with revitalised capabilities.
In spite of the overall steady industry growth, the pressures faced by long-only investment managers, PE managers, and hedge funds have remained constant for the past several years. The cumulative effect of fee pressure, a shift to passive investments, and concentration of success in gathering assets is driving many firms to continue to take bolder actions to find growth, operate efficiently, and engage customers. In 2020, many alternative and long-only investment managers alike could cross boundaries and leave their comfort zones.