Our London roundtable recently discussed what other risk, apart from Covid-19, is the current major factor for the asset management industry. Here three panellists give their answers.
Pacal Duval, head of retail solutions, Amundi – Firstly, there is fantastic opportunity ahead of us. There’s a lot of cash accumulating into bank deposits. That is the opportunity for us to demonstrate that we can add value above cash, which maybe ten years ago we would say, ‘Easy,’ today it’s not that easy, but that’s our opportunity to really show our value add as asset managers.
The second thing is a risk: liquidity. Trading bonds, even investment grade bonds, was very difficult at some point between February 28 to the beginning of May; it was not rare to trade at 5%, 7% or 9% discount. The industry still has a tendency to mismatch liquidity. In terms of liquidity, we are our own demons. So, at Amundi it is very clear that it’s liquidity first and performance second.
Robin Creswell, managing principal, Payden & Rygel – I would turn the question upside-down and say that, apart from Covid, never let a good war go to waste. The industry has more opportunity now, because management structure is being thrown up in the air, consolidation is well and truly on the table and the capital markets are prepared to finance and support consolidation. I see very few structural risks to the industry, and actually considerable upside, because the pressures that we’ve been under over the last ten years are now recognised and we’ve got the management tools, we’ve got the finance and we’ve got the motivation to reform the industry.
Our industry is going to grow very substantially over the next ten years, the capital markets are going to increase, the amount of money floating around the system is going to increase, so really there’s very little risk to the industry. There’ll be some losers, but on balance, the industry is going to grow and there’s just massive potential and upside.
Nigel Smith, managing director, UK client group, Ninety One – As a born optimist, I think about turning risk into opportunity; those two things do often go hand-in-hand. The reputation of our industry has taken a few knocks in the last decade or so, but I think there definitely is an opportunity for us to rebuild its reputation and demonstrate that we do care deeply about creating value for clients, but also this question of marshalling capital to secure a better future world for everybody.
The good news is that the pandemic has accelerated a number of things, especially real long-term action around sustainable investing and climate action. That has created the opportunity for the industry to come together as one and address these imperatives.
From our 2020 Global Industry report.
© 2021 funds europe
