Commoditisation of liquid markets, the continued growth of investor ESG appetite, private markets and an increased focus on gender, ethnic and neuro-diversity in hiring practices are some of the most talked about trends for the coming year across senior heads of distribution in EMEA, Asia and the Americas.
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Private markets are by far the most popular this year, with the majority of respondents indicating that private credit, private equity, real estate and infrastructure were anticipated to see the most demand.
A combination of undeployed dry powder, inflation, interest rates and a booming curiosity in logistics and infrastructure are set to drive this demand.
The recent value rotation has resulted in diminished interest for public equities, with the asset class recording half the demand it saw in last year’s barometer, while ESG and impact investing demand has more than halved.
Despite this, regional client facing sales teams are being expanded in order to focus on winning ESG clients.
The vast majority of firms believe ESG is well represented by its distribution function, however things can always improve, and corporate engagement and stewardship activities are highlighted as particular areas that would create a stronger narrative for clients.
Internal education on ESG topics, proprietary research and dedicated ESG client functions were also cited as potential paths for progress.
Fee compression remains the biggest challenge for asset managers, while market conditions, talent retention, inflation and increased competition round out the top five headwinds for the industry.
Diversity and inclusion remains a key theme within the development of hiring practices at asset managers, with 83% of respondents having implemented active initiatives to address inequality.
The majority of firms have taken action at the junior level, in order to provide a more steady and stable flow of diverse candidates, which will provide a representative mix of senior professionals over the coming decade.
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Some firms have begun to improve the inequality of senior roles by running diversity leadership programmes and internal promotions.
In order to continue this progress, 29% of respondents believe that organic diversity should be the focus, reaching out to a diverse pool of graduates with a specific emphasis on demographics that may not have previously considered a financial career.
A quarter believe that “keeping the conversation and relevant” should evoke actionable change, while a fifth argue that diversifying senior management should be a focus.