2024: A Year of Continued Volatility for Asset and Wealth Managers
03 Januar 2024 - 3:30PM
Alpha FMC, the leading global consultancy to the top asset and
wealth management, insurance, and private markets firms, today
published its 2024 Asset and Wealth Management Outlook. The report
focuses on a selection of key business roles that Alpha works with
daily and highlights some of the priorities and opportunities these
industry leaders can expect to see in 2024, as investment managers
across the globe prepare for tumultuous economic headwinds.
Written by a selection of Alpha’s 1,000+ global experts, the
2024 Outlook challenges firms to identify the right priorities and
provides guidance on how they can best execute on those
opportunities in 2024 across the following key industry trends that
we believe are set to impact the Investment Management industry:
accentuated costs; the continued growth in Private Assets; a
refined focus towards global sustainability commitments; and the
exploration of innovative AI solutions.
“We expect 2024 will promise continued volatility, most notably
with the resolution or escalation of existing conflicts and
geopolitical uncertainties playing a crucial role in the direction
of global markets,” said Joe Morant, Alpha’s Global Head of Asset
& Wealth Management Consulting. “However, alongside this
macroeconomic environment, the opportunities presented by
accelerating digital transformation and integrating technologies
like artificial intelligence, machine learning, and digital assets
are becoming pivotal to optimizing operational efficiency and
enhancing client experiences.”
Alpha’s 2024 Outlook identified key challenges to consider for
select personas, while also providing clear guidance on how each
can find success this year. For example:
Asset Management:
- Chief Executive Officer: CEOs will be looking
to maintain stability over the short term and position their
businesses for long-term growth in response to the challenging
economic conditions of the last 12 months. Now is the time for CEOs
to explore regional and international expansion opportunities
either through deploying existing capabilities or building new ones
(organically or inorganically). Firms that pinpoint where
enhancements are required across their existing capabilities and
operating model will be well-positioned to enter new markets and
cater to local demand once economic conditions improve.
- Chief Financial Officer: In 2024, CFOs will be
grappling with the impact of peak inflation and will need to
prepare for long-term market conditions, characterized by fewer
rate hikes and less severe inflation compared to 2023. The classic
delayering approach to cost-cutting seen in banks overlook
specialist investment management roles, and therefore cannot be
deployed crudely across investment managers. Firms should identify
long-term growth opportunities, instead of short-term remedies,
starting with the largest cost items: People, Technology and Market
Data.
- Chief Investment
Officer: CIOs are facing significant headwinds in a
rapidly changing landscape. A pivotal aspect is the relentless
pursuit of competitive advantage to differentiate, particularly in
areas like Data Science and AI. The pace of change in these fields
is accelerating exponentially, necessitating the acquisition and
integration of new capabilities and skillsets.
Alternatives:
- Credit: Alternative Credit will continue to
experience enormous growth in 2024, with borrowers increasingly
preferable to flexibility of a bi-lateral or club-like relationship
in contract with a broadly syndicated arrangement. The influx of
institutional capital chasing yield will continue to provide the
requisite capital to reshape the landscape of private credit to be
a material competitor to the traditional banks. Investment managers
looking to expand their investors will need to have both the
operational rigor and technical agility to capture and disseminate
the requisite information that investors demand and require.
- Real Estate: The evolving global economy and
advancements in technology continue to drive Real Estate investors
to seek greater operational agility and deeper insights in an
unpredictable landscape. Firms are realizing the potential of
leveraging Artificial Intelligence (AI) and Machine Learning (ML)
across a multitude of use cases, but appreciate the importance of
organized, standardized, and accessible data as a baseline, before
the benefits of AI can be truly harnessed. Additionally, further
advancements in blockchain technology have the potential to
revolutionize the market, with the subsequent ‘retailization’ of
Real Estate providing firms with increased liquidity, greater
investor access and heightened transparency.
Wealth Management:
- Chief Executive Officer: With market sentiment
and environments expected to continue from 2023 into 2024, CEOs
will continue to balance the search for organic (and inorganic)
growth with the need for efficiency and focus to return cash to
shareholders. The threat of new, digitally-enabled entrants has
diminished as clients have demonstrated loyalty. However, keeping
up with the pace of digital innovation has become both a client and
Relationship Manager attrition risk and a cause of stubborn cost
pressures in Front Office, Compliance and Operations.
- Chief Operations Officer: With pressure on
margins crystallizing and competition not easing, COOs’ agendas
remain very challenging and under heavy scrutiny. They face a
challenge between upgrading capabilities of their platform for
modern requirements and regulatory regimes vs. removing costs
quickly. Business Process Outsourcing, while still maturing in some
regions, merits consideration due to the potential to control total
cost of ownership and service levels, even if the case for cost
reduction isn’t yet as clear.
About Alpha FMCHeadquartered in the UK and
quoted on the AIM of the London Stock Exchange, Alpha is a leading
global provider of specialist consultancy services to the asset
management, wealth management and insurance industries. Alpha works
with all of the world's top 20 and 80% of the world's top 50 asset
managers by AUM, along with a wide range of other buy-side firms.
It has the largest dedicated team in the industry, with
approximately 1000 consultants globally, operating from 17
client-facing offices spanning the UK, North America, Europe and
APAC.
Media ContactMadison ThomasCSG for Alpha FMC
AlphaFMC@wearecsg.com
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