The global asset management industry is set to continue enjoying growth in assets, but the pressure on fees is intensifying, says a new report from consulting firm Cerulli Associates.
The Boston-based firm projects that global assets under management (AUM) will continue growing “for the foreseeable future,” but that pressure on industry margins will keep rising too.
“Decision-makers in the asset management industry are having to weigh a wide variety of factors, including regulation, fee compression, persistently low yields, and political and economic uncertainty,” André Schnurrenberger, Cerulli’s managing director for Europe, said in a statement.
“In addition, we are increasingly seeing regulators seeking to promote investment, particularly saving for retirement, and several countries have introduced legislation that seeks to make the industry more transparent and user friendly,” Schnurrenberger added.
The report also highlighted growing demand for environmental, social and governance (ESG) investing.
For instance, Cerulli reported that its survey of asset managers found that 56% are anticipating fast growth in ESG assets, and 39% anticipate moderate growth. This trend is also evident in the U.K., Cerulli noted.
“We are bullish on the long-term prospects of success when it comes to ESG integration and see shifting demographics and the impending intergenerational wealth transfer as causes for optimism,” said Justina Deveikyte, associate director, European institutional research at Cerulli.
“Investors under age 40 prefer strategies that incorporate ESG and many investment platforms are recording an increasing number of searches for ESG solutions,” Deveikyte added.