Mind the gap

Gill Wadsworth writes this week on research from Citi and CREATE-Research which finds that the gap between mega and niche asset managers is widening.

Professor Amin Rajan, CEO of CREATE-Research and the report author, says the multi-trillion-dollar asset management houses will continue to swallow up smaller and medium sized competitors in their pursuit of global assets.

"An ill wind has been blowing through the industry over the past decade, causing unusual reversals. Asset in-flows have been mostly going to mega indexers… and alongside the recalibration of the value chain, industry consolidation will continue,” Rajan says.

When not looking over their shoulders for apex predator asset managers, asset allocators are seeking protection in bonds, recognising persistent uncertainty in the markets and taking to fixed income according to a new study from PGIM.

Matt Shafer, the head of international intermediary distribution at PGIM, recognises the continued investor appeal of fixed income as tariffs, equity market volatility, and slowing economic growth fuel uncertainty.

“In a market defined by policy confusion and turbulence, clients are turning to fixed income for both steady income and critical downside protection,” Shafer says. “As market dynamics evolve, multi-sector strategies with the flexibility to pivot across bond segments based on relative value are seeing particularly strong demand.”

This week also sees us bring you the Global Digital Asset review, produced in partnership with Trackinsight, CoinDesk and ETF Express. Lead Research at CoinDesk, Joshua de Vos noted that June saw a deceleration in digital asset investment activity, with USD6.03 billion in net inflows, down 17 per cent from May’s USD7.33 billion, according to TrackInsight data.

Despite this, crypto hedge fund firm Nickel reports from their survey that crypto fund launches are likely to rise. The study with pension funds, insurers, family offices, wealth managers and hedge funds invested in the sector, found 43 per cent believe there will be a dramatic increase in traditional financial firms launching crypto funds and investment solutions over the next two years. A further 53 per cent believe there will be a slight increase. Nearly three out of four (73 per cent) of the institutional investors and wealth managers questioned expect a rise in digital asset fund launches in general this year with just 2 per cent predicting a decline.

Beverly Chandler, Managing Editor, Institutional Asset Manager

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