Optimism remains on the long-term outlook for Asia Pacific with the region expected to account for nearly half of all net investment flows in the asset management industry, according to a study by Broadridge.
The source of net investment flows in the coming decade is expected to shift from the US and Europe to Asia Pacific, according to a study by Broadridge Financial Solutions titled «The New Competitive Calculus: Winning with Data-Driven Strategy».
Between 2011 and 2021, APAC drove 26 percent of net flows but this is expected to soar and reach 42 percent between 2022 and 2031.
Shifting Flows
The seismic shift in flows will extend beyond geographies. Individual investors will overtake institutional investors by driving 69 percent of flows between 2022 and 2031 while private markets will make up 32 percent of net flows in the same period, up from 16 percent in the previous decade.
«Opportunities will be driven by different capabilities and clients – from institutions to individuals, and from the US and Europe towards Asia, especially China,» said Ben Phillips, head of asset management global advisory services at Broadridge.
«While secular changes manifest in different ways, there are still primary drivers that asset managers need to look out for to maximize their growth. The reality is that these changes are creating unmet needs, all of which are opportunities to innovate and reposition themselves for growth.»
Four Differentiators
Meanwhile, organic growth across the global asset management industry is expected to slow from a compound annual growth rate of 3.9 percent to 1.7 percent in the last and current decade, respectively. For those seeking to remain competitive, «performance is not enough to stand out».
According to the study, there are four major areas for asset managers to outdo rivals: faster product innovation, stronger distribution, more flexible delivery and better branding.
