德勤-2020年投资管理展望报告（英文）-2020.2-32页_9mb

2020 Investment Management Outlook Summary

Core Content

The 2020 investment management outlook outlines the strategic directions and challenges that firms are expected to face as they seek profitable growth in a rapidly evolving industry. Key themes include the need to cross traditional boundaries through mergers and acquisitions (M&A), innovation in technology, and the development of new products and markets to meet changing investor expectations.

Main Points

1. Mergers and Acquisitions (M&A)

• The pace of M&A is expected to increase as firms look to expand capabilities and enter new markets.
• M&A is used to achieve scale, diversify product offerings, and enhance geographic presence.
• Successful integration is critical to realizing value from M&A, and firms are likely to implement integration management offices (IMO) to manage cross-cultural, technological, and talent integration.

2. Expansion into Emerging Customer Segments

• Investment managers are targeting new demographic and geographic segments, such as Asian millennials and the aging workforce.
• Cultural resonance, technological delivery, and alignment with ESG principles are essential to engage these new segments.
• The regulatory environment in China is becoming more favorable for foreign investment managers, although challenges remain due to the region's diversity and risk factors.

3. Adoption of Alternative Data

• Private equity (PE) firms are increasingly using alternative data for deal sourcing and due diligence, following hedge funds and long-only managers.
• Alternative data provides valuable insights that can transform portfolio management and enhance competitive advantage.
• A robust technology infrastructure, data governance, and skilled talent are necessary for effective use of alternative data.

4. Shift to a "Save-to-Transform" Approach

• Investment management firms are moving from traditional cost-efficiency projects to a more strategic "save-to-transform" approach.
• This includes investing in technology and innovation to drive growth while maintaining cost control.
• Firms with a higher level of technology spend and a focus on digital enablement are better positioned to achieve operational efficiencies and competitive advantage.

5. Product Development and Market Expansion

• Investment managers are developing new products, such as sustainable funds and thematic ETFs, to meet evolving investor needs.
• These products are often tailored to specific market trends, like sustainability, megatrends, and ESG principles.
• Active managers are facing pressure due to the underperformance of traditional active strategies compared to passive funds, and must innovate to remain relevant.

Key Information

Strategic Growth Quadrants

• Market Development: Expanding existing products to new investor segments, including geographically and demographically.
• Diversification: Offering new products in new markets through M&A and strategic partnerships.
• Market Expansion: Enhancing existing products to compete in a market dominated by passive strategies.
• Product Development: Creating new investment products for existing markets, often driven by regulatory and market trends.

Performance Trends

• Passive funds have grown to be the largest portion of US fund assets, outperforming active funds.
• Private equity has consistently outperformed, even with regular fund liquidations.
• The US economy continues to expand, while European and Chinese markets face challenges.

Operational Transformation

• Operational transformation is necessary to achieve greater efficiency and competitive advantage.
• Successful firms integrate people, processes, and technology to optimize performance.
• Technology spending, particularly in AI, cloud solutions, and automation, is a key driver of operational efficiency.

Risk Management

• Modern and robust risk management is crucial for supporting operational transformation and strategic growth.
• Firms are increasingly focusing on the "three lines of defense" (LOD) to manage risks effectively.
• The adoption of a "golden copy" investment book of record (IBOR) is helping firms manage compliance and risk across all departments.

Conclusion

In 2020, investment management firms are expected to adopt a more strategic and innovative approach to growth. This includes leveraging M&A, technology, and alternative data to expand into new markets and customer segments, while also transforming their operations to enhance efficiency and risk management. The industry is moving towards a "save-to-transform" mindset that combines cost control with strategic enablement, and firms that successfully navigate these changes will gain a competitive edge.