A panel discussion took place at FundForum 2023, held at the Grimaldi Forum in Monaco, with the aim of exploring growth dynamics and strategic challenges faced by global asset managers and boutiques in the US, Europe and Asia.
Moderated by Richard Bruyere, managing partner at Indefi, the panel session was titled ‘Asset management across the globe: growth dynamics and strategic challenges in the US, Europe and Asia for global asset managers and boutiques’ and brought together CEOs from top-flight global asset managers, boutiques and specialist players from around the world.
The session began by addressing the rapid growth of ETFs compared to mutual funds. Jim McCaughan, chairman of Polen Capital, identified “producing products that clients want to buy and can buy” as a key driver of growth, alongside investment performance.
Jonathan Krane, founder and CEO of KraneShares, noted the increasing prevalence of model portfolios of ETFs, particularly in the wealth management and private banking sectors, where advisors use them as tactical investment strategies. He also highlighted the growing trend of asset managers partnering to create model portfolios for joint distribution, predicting further cooperation in the future.
Contrary to the notion that mutual funds will become obsolete, Orla Foley, principal and global head of relationship management at Brown Brothers Harriman, argued that they still have a place in the industry. She emphasised the importance of delivering value for money, choice, and exceptional service and user experience to investors.
Alexandra Altinger, CEO of J O Hambro Capital Management for the UK, Europe, and Asia, underscored the significant role played by Undertakings for the Collective Investment in Transferable Securities (Ucits), which provide a common framework for different jurisdictions. She highlighted its relevance in the post-Brexit environment, where reciprocity and equivalents are embedded in the Ucits structure.
Stefanie Drews, president of Nikko Asset Management, also emphasised the need to understand client needs and provide solutions in a manner independent of specific investment vehicles. She said that Ucits are here to stay and will remain the dominant vehicle. “If an investor wants something customised they can build it through ETFs, but other than that, Ucits should be the vehicle of choice.”
She shared examples of her company’s use of AI for language translation, highlighting how language is no longer a barrier and emphasising the value of leveraging talent and connectivity.
The panel also addressed environmental, social and governance (ESG) issues. Drews praised the EU’s Sustainable Finance Disclosure Regulation (SFDR) for promoting convergence between Asian and European standards. Krane mentioned impact investing as a long-term theme within ESG, highlighting the growing focus on carbon credits.
In Japan, the launch of a new fund scheme was seen as a game-changer. Drews anticipated a surge in this space, with a variety of products catering to diverse needs, while passive investing is also expected to gain traction.
Regarding geopolitical influences, Altinger stressed the need to strike a balance between scaling up and preserving the autonomy and unique identity of individual brands when expanding into new locations.
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