Globally, 67% of senior executives at asset management firms choose a multi-asset solution as the investment strategy most likely to drive growth for their business in the next 12 months, according to a study by FT Remark and State Street.
This aligns with the survey’s Canadian statistics, but Canadian executives are even more optimistic, with 87% of them citing multi-asset investment solutions as the key to growth over the next three years.
Despite this optimism, however, 86% of Canadian executives believe that many asset managers are not equipped to address this solution.
Rob Baillie, CEO of State Street Canada, said that asset managers with “the breadth across all asset classes is the exception rather than the rule.”
In order for asset management firms to gain this breadth of talent, they will be looking to increase their manager expertise. One way to do this will be through mergers and acquisitions.
According to the survey, 67% in Canada see increased opportunities for acquisitions in the next 12 months. This, said Baillie, will assist managers in acquiring the talent they need to execute this multi-asset solution.
Canadian investment management firms are also planning to move into new markets, with 38% looking into Latin America, the United States, EMEA (Europe, the Middle East and Africa) and APAC (Asia-Pacific).
“That goes anecdotally with what we’re seeing,” Baillie said. “It’s challenging to achieve growth targets within the four walls of Canada.”
Even new product development within existing country markets will play a role in growth, with 43% of Canadian asset managers planning to develop new products in these markets.
However, launching new products nationally across Canada, with its numerous jurisdictions, has always been challenging for asset managers, noted Baillie, adding that he hopes this might open up the single-regulator debate again.
Overall, a move to a multi-asset investment solution will be good for the more than 600 small- to medium-size DB pension plans in Canada, he said. With smaller plans having limited resources, this will make it “simpler and deliver superior results.”
FT Remark interviewed 300 senior executives at asset management firms in April and May of this year.
Related articles: