Many institutional investors are confident that asset managers will navigate the current crisis – but market volatility sparked by Covid-19 has damaged the ability of many to meet their short-term objectives, research by State Street Corporation suggests.
Nearly three quarters of institutional investors surveyed were confident in their asset managers but about two thirds said short-term targets were affected by dramatic falls in asset values and funding levels.
Joerg Ambrosius, head of Europe, Middle East and Africa at State Street, said: “The survey findings indicate a slightly more upbeat perspective than many would have expected. With the slowing of Covid-19 cases across Europe and the phased restart of its most impacted economies, it appears that some investor confidence may be returning.”
Despite this apparent optimism, nearly half of the survey’s 250 respondents (49%) believe asset managers are underestimating the impact and severity of the crisis.
Whilst the pandemic took both investors and fund managers by surprise, many appear to be optimistic regarding their longer-term growth, with more than half of respondents saying they will not miss their long-term objectives.
Conversely, in order to reach these objectives, around one-third of institutional investors would like more support on their investment opportunity assessment (34%), economic projections/forecasting analysis (33%), and timing for action/reaction (36%).
Ambrosius added: “Reflecting this reality, investors are looking for strong support from their asset managers to navigate the crisis and deliver alpha in support of client objectives. Asset managers now face one of their greatest challenges and will see how well-positioned they are, for a return to the ‘normality’ that awaits us all, as we emerge from this crisis.”
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