Strategies For a New Growth Cycle: Asset Management News

Overview

As the business cycle turns, so the asset management industry is once more gearing up for growth.

Confidence has generally returned to pre-crisis levels, as the sector's CEOs told us when interviewed for the PwC's 14th Annual Global CEO Survey, published in January; they were also more optimistic than their peers in other sectors.

Yet the credit crisis has left its scars. For a start, the aftermath of the crisis has reignited the debate over scale. Evidently, scale means different things to different firms. As we look forward, managers will have to understand how the need for scale affects their businesses and adapt their strategies accordingly.

Regulation is the clearest consequence of the crisis. As we explain later in this issue, we firmly believe that the approaching wave of regulation provides an opportunity to re-examine strategy, rather than simply being a compliance nightmare.

Our CEO survey also showed that many firms (more than 30pc) were seeking to position themselves for future growth through acquisitions. A large number of them are seeking acquisitions in emerging markets. Certainly M&A has a greater role to play in implementing growth strategies today than previously, as the last 12 months' high number of transactions show.

For real estate, as one corner of the asset management market, this optimism is still varied. In Asia, confidence is back at pre-crisis levels, but in Europe and the United States the market's problems are deeper. Here, managers need strategies for adapting to harsh conditions.

However, it's evident that asset managers generally see themselves at the beginning of another growth cycle. Most asset classes are recovering, confidence is returning and assets under management are rising. But no two business cycles are the same and today's sources of growth are different from yesterday's. CEOs would be wise to consider this as they review their growth strategies.