2018年-德勤全球_2019_Investment_Management_Industry_Outlook_24页_2mb

2019 Investment Management Outlook Summary

Core Content

The 2019 Investment Management Outlook highlights the evolving landscape of the industry, emphasizing the need for investment managers to adapt to a mix of challenges and opportunities. The report outlines key areas of focus for firms, including growth strategies, operational efficiency, and customer experience, while also addressing the impact of regulatory changes and technological advancements.

Main Viewpoints

1. Challenges and Opportunities

• Investment management is undergoing rapid change due to shifting investor preferences, margin compression, regulatory developments, and emerging technologies.
• The long bull market has reduced the intensity of some challenges, but market cycles mean that new opportunities and risks will continue to emerge.
• Successful investment managers in 2019 will be those that can effectively manage these changes and maintain a competitive edge.

2. Growth Strategies

• Long-only managers face more acute growth challenges compared to alternative managers, as passive funds continue to gain market share.
• Passive funds are expected to grow significantly, with global ETF assets potentially reaching $25 trillion by 2025.
• Active managers must continue to justify alpha generation, as 86.7% of US active funds underperformed their benchmarks over a 10-year period.
• Private equity (PE) firms have seen strong performance and large inflows, with dry powder reaching $1 trillion by 2018.

3. Market Expansion

• Investment managers are increasingly targeting China, India, and Asia Pacific for growth, driven by regulatory changes and shifting investment preferences.
• Strategic acquisitions and partnerships are key methods for entering new markets and enhancing product offerings.
• AI and alternative data are being leveraged to improve investment decisions, offering customized portfolios and digitized customer service.

4. Operational Efficiencies

• Firms are focusing on technology, talent, and process improvements to enhance operational efficiency and manage shrinking margins.
• Cloud migration and advanced analytics are becoming essential for achieving scalability and cost reduction.
• AI applications in investment analytics, risk management, and customer engagement are enabling more informed and efficient decision-making.

5. Regulatory and Compliance Considerations

• Regulatory fragmentation remains a challenge, with different priorities across the US, Europe, and Asia.
• Regulatory changes, such as the SEC ETF proposal and GDPR, are influencing compliance strategies and data management practices.
• The 2017 Tax Act has impacted PE firms, particularly through changes to debt financing limits and carried interest provisions, prompting shifts in operating locations and transaction structures.

6. Pricing Models and Innovation

• A new pricing model for passive funds, including zero-fee ETFs, is changing revenue strategies, with firms focusing on securities lending, order-flow payments, and shareholder-servicing fees.
• The fulcrum model for active funds links fees to performance, creating a win-win scenario for investors and managers.

Key Information

• Passive funds are growing rapidly, with zero-cost ETFs expected to accelerate this trend.
• Alpha generation is a critical challenge for active managers, with many underperforming benchmarks.
• Private equity has seen strong performance and inflows, with record dry powder available for new investments.
• Millennials and Gen Z are changing investment practices, favoring digital and mobile-first approaches.
• Regulatory changes are influencing compliance strategies and operational models, especially in the EU and US.
• AI and alternative data are being used to enhance investment decision-making and customer engagement.
• Cloud technology is helping firms achieve operational scalability and reduce fixed costs.
• Brexit and tax laws are prompting firms to re-evaluate operating locations and structures.
• Proprietary indexing and alternative data integration are expected to become more common in 2019.

Predictions for 2019

• Crossing the Great Wall: Success in China and Asia Pacific will require local partnerships, product transparency, and distribution agility.
• Fulcrum fees: More than 10 firms are expected to adopt performance-based fee structures for active funds.
• Proprietary indexing: The number of firms launching proprietary ETF indices is set to increase, potentially reducing expense ratios.
• Alternative data: PE firms and long-only managers are likely to adopt alternative data for investment decision-making.
• Regulatory scrutiny: Robo-adviser models will face increased regulatory attention, especially in China.

Strategic Recommendations

• Invest in data storage and analytics to enhance alpha generation and decision-making.
• Be aggressive in acquiring new capabilities through M&A and minority stakes.
• Adopt a "zoom out/zoom in" approach to technology investments, balancing long-term vision with short-term execution.
• Design compliance processes that align with new regulations, leveraging existing systems where possible.
• Build trust among stakeholders to ensure successful integration of new technologies.
• Focus on customer experience by leveraging digital tools and personalized services to meet evolving investor expectations.

Conclusion

The investment management industry in 2019 is characterized by a complex mix of challenges and opportunities. Firms that can navigate regulatory changes, adopt new technologies, and deliver superior customer experiences are more likely to thrive. Strategic investments in data analytics, operational efficiency, and market expansion will be crucial for long-term success.