Will global assets under active management rise, level out or fall over 2021?

Chapter 2 Asset growth

Active managers may have a smaller percentage of the pie in future.

Beltrán Parages, Azvalor

Will global assets under active management rise, level out or fall over 2021?

ANTHONY CARTER Fixed Income & Multi-Asset Portfolio Manager, Sarasin & Partners Rise due to ongoing massive money creation by central banks, with a lot of this money finding its way into the asset management industry.

DEB CLARKE Global Head of Investment Research, Mercer Our crystal ball says they will rise, more so in 2022 than in 2021, mostly driven by markets in general rising, but also as institutional investors bias somewhat towards active management rather than passive management. The driver for this shift will be a recognition that active strategies can play a role in portfolios to more specifically address sustainability factors, including those investors who want to invest for impact. There will always be a place for passive strategies but that passive exposure may change over time and focus on broader factors than just market capitalisation.

JAI JACOB Managing Director & Portfolio Manager in Multi-Asset, Lazard Asset Management Rise. Passive is increasingly a way of accessing the world’s 10 largest companies. As I expect those companies to make up a smaller percentage of the total assets, I expect active to rise. Another supporting argument is that active management is poised to become more accessible via ETF structures, and more value-added in terms of climate and social alignment.

BELTRÁN PARAGES CEO, Azvalor Passivisation and indexation will continue to grow. These are both strong trends and have good reasons to keep on growing. So, I think active managers may have a smaller percentage of the pie in future. However, the increase of total new money in the industry (and in the world!) should compensate for it, and in nominal units, we will see higher AUMs in active management. MATTHIAS SCHEIBER Global Head of Portfolio Management for Multi-Asset Solutions, Wells Fargo Asset Management Global active assets under management are likely to rise next year. There is strong investor demand to put dry powder to work as interest rates are very low. In this environment of higher liquidity and low interest rates, income solutions and risk-managed growth solutions continue to be in demand. ESG awareness has increased across the industry and the latest change in the US administration is likely to positively support further global efforts in this area. The issuance of green bonds in the UK is the latest example of a widening of the investment universe available to asset managers.

ERIC VANRAES Fixed Income Portfolio Manager, Eric Sturdza Investments I believe they will rise due to fixed-income inflows. Active management will outperform passive in 2021.

CHITRA BASKAR COO & Global Head of Funds & Product, Intertrust Group As per some surveys, asset managers expect that Covid-19 market volatility will drive a significant interest in active management, with over half of hedge fund managers (52 per cent) surveyed believing that the impact of Covid-19, and the related market volatility, will increase investor interest in active management. 30 per cent of the surveyed investors were of the same view.

Private capital strategies always have preferred active management to achieve above average results. The current pandemic has led to a more distressed situation, requiring an even better management of its investments. Therefore, private equity and private debt will also see a rise in global assets under active management.