A new report on the global active asset management industry says managers must work harder in a number of critical areas, especially in APAC, where confidence in active managers is low.
Asset managers are not doing enough to address investors’ evolving challenges and expectations, Allianz Global Investors said in a new report «Staying Active: How to Regain Trust in Active Management,» which incorporates the views of nearly 500 institutional investors globally who together represent $15 trillion in assets under management.
Only 51 percent of APAC respondents felt that active managers were better stewards than passive, compared to 61 percent globally.
Seventy percent of investors in APAC, which constituted about one-quarter (24 percent) of the overall respondents, said they thought active managers were best placed to capitalise on the investment opportunities presented by digital transformation, but only 29 percent of them felt active portfolios were worth the cost. Additionally, in the region, 63 percent prefer fee structures that are aligned with performance, lower than their global peers at 68 percent.
Not Only Performance
Performance was not the only factor that influenced investors' choice of managers. While 51 percent of APAC respondents cited performance as among the top 3 priorities in manager selection, 40 percent said they wanted long-term relationships with firms that understand their business goals and challenges, and 37 percent said they want specialist expertise in a particular asset class or strategy.
The report also asked investors what their main concerns for this year and found that in APAC 80 percent were most worried by monetary policy, 77 percent by market volatility, and 76 percent by inflation.
«For Asia Pacific, the variants of the findings among different markets prove again the importance of customised solutions supported by on-the-ground professionals who know the markets and clients well; and only active managers are able to deliver such solutions that are meaningful with value to clients, and hence stand out in the current environment,» Desmond Ng, Head of Asia Pacific, Allianz Global Investors, said.
Recommendations
Allianz highlighted several areas in which asset managers could focus on to win greater confidence and long-term commitment from investors: offer innovative approaches, facilitate ESG investing, inform investors on alternatives, adopt technology to enhance client outcomes, and champion innovative fee models.
