The asset management industry could see major structural changes, an increased role for the middle office, and a move towards responsible investment, according to a panel at TSAM Europe in London.
Panelists discussed what they expect to see changing in the industry in the next five to 10 years, and the opportunities that could arise.
Janice Turner of AMNT suggested that pension schemes would become more involved in responsible investment, and that fund managers could be given a greater say in where their finds are invested, saying: “They feel like they have responsibility without power.”
She suggested that smaller pension schemes are not currently expected to be involved in responsible investment, but pointed out that these collective make up about half of the pensions industry.
Rakesh Vengayil, COO of the Asia Pacific and emerging markets at BNP Paribas Investment Partners, anticipates a change in investor demands, and an increase in the importance of data requirements. He also expects opportunities to arise in emerging markets.
The final panellist, Srivathsa Gopinath of Goldman Sachs Asset Management, highlighted the role of operations in the industry, particularly in the middle office.
He suggested that serious structural changes could be on the horizon, with more demand for product-based solutions. As the demand for transparency grows, investors will want to be more involved in operations, he said, adding: “Transparency is huge.”
Gopinath asked the question, “how quickly can we adapt?” He said that a strong middle-office operations team could drive costs down, and suggested that asset managers should consider what is best for themselves and their clients when deciding whether to create solutions in-house, or to outsource.
Vengayil agreed with this, saying that “the position of middle office has shifted” and that operations teams will become more than service providers, acting more like partners.
