The economy is showing signs of improvement and it looks like business optimism among U.S. investment managers is on the rise along with it, according to a poll released last week by SEI.
The poll, conducted at a recent event for the company’s investment manager clients, found that 78% of respondents are optimistic about their firms’ business prospects over the next three years. As well, 86% of those polled said they believe investor confidence levels are higher today than in the aftermath of the financial crisis. There are a number of reasons behind the optimism, but brand strength was cited most frequently (32%), followed by positive market prospects for their strategies (24%) and strength of their distribution strategies and resources (21%).
For those managers expressing concern about their prospects, weak distribution strategies and weak resources were the most commonly cited reasons.
The poll showed that managers are backing up their optimism by investing in their businesses. The top three selections for investment in the next 18 months were marketing and distribution (45%), back-office operations and technology (23%) and portfolio management (10%).
Business opportunities in alternative investing and in the institutional channel were indicated as the greatest opportunities for growth. Of those surveyed, 83% said they believe that firms managing active alternative strategies have the best prospects for asset growth over the next three years, and 69% said institutional channels present the greatest opportunity for asset growth over the next 12 to 18 months.
“While the markets remain somewhat volatile, managers are seeing investor confidence grow, which gives them greater business optimism, and that leads to more business investment,” said Ross Ellis, managing director, knowledge partnership, with SEI’s investment management services division.
While there is broad optimism, 36% of respondents said they see economic uncertainty as the most significant challenge the industry faces over the next 12 to 18 months, followed by geopolitical uncertainty (30%) and regulatory requirements (22%).