The appetite for mergers and acquisitions is increasing in the asset management industry both in emerging and developed markets, according to a KPMG survey.
One of the biggest shifts in the asset management industry in the past year is the rise in appetite for mergers and acquisitions, according to a KPMG survey of chief executive officers in the industry. 58 percent now say they have a high appetite for M&A with 6 percent claiming low appetite in 2023, compared to 40 percent and 17 percent, respectively, in the previous year.
Within the Asia Pacific region, this is being driven by increased demand for asset management platforms alongside the nascency of the industry in other emerging markets. And in developed markets, a common driver is the pressure for companies to increase scale.
Optimistic Outlook
Overall, the industry remains largely optimistic with 76 percent of asset management CEOs confident in industry growth and 73 percent confident in their own firm’s growth prospects. 89 percent expect to report growth over the next three years, compared to 90 percent in 2022.
Nonetheless, there are still risks looming with 17 percent citing political uncertainty as a top threat (up from 4 percent in 2022) while interest rate concerns remain unchanged at 15 percent.
Tech Investments
The survey also highlighted that 58 percent of CEOs are investing capital in new technology with 69 percent claiming generative AI as a top priority. Within this space, new product and market growth opportunities (23 percent), fraud detection and cyber attack response (18 percent) and automation of routine operations (16 percent) were seen as the leading benefits.
The «KPMG Asset Management CEO Outlook» is based on a survey of 80 leaders of asset managers with revenues of at least $500 million. They are based in Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, the UK and the US.
