Alpha FMC, the leading global management consultancy serving the asset management industry, working with 80% of the top 100 global asset managers by AUM, today published its 2023 Asset and Wealth Management Outlook. The 2023 iteration of the report focuses on a selection of personas that Alpha works with daily and where these industry leaders should focus their attention heading into the new year, an especially timely focus as investment managers across the globe prepare for tumultuous and varied global economic headwinds.

The Outlook was written by a selection of Alpha’s 900+ global experts and provides clear guidance on identifying the right priorities and challenges. The Outlook takes a deep dive into four key industry trends that Alpha believes are set to have the biggest impact on the investment management industry: addressing structural drivers of cost, ESG commitments, growth of private assets and data-driven decision making.

“2022 was another turbulent year. Though undoubtedly challenging, the threat of recession and uncharted market conditions in 2023 should be approached as an opportunity for asset and wealth management leaders,” said Michael Burns, Head of North America Asset and Wealth Management Consulting at Alpha FMC. “The asset and wealth managers who have strategic focus and prioritization will be well positioned well for success in the near- and long-term.”

Alpha’s 2023 Outlook has identified key priorities to consider for select personas. For example:

Asset Management:

  • Chief Executive Officer: Now is the time for active investment managers to demonstrate and articulate the value of active strategies, and invest in future-proofing their operating models. CEOs should focus on forward-thinking positioning, executing on a clear data strategy and shifting attitudes in ESG and managers’ role in reflecting these. Additionally, CEOs should focus on scale – reducing complexity and equipping their business to scale effectively and efficiently. Internally, CEOs should focus on how to enhance the workplace culture and harness the power of change & innovation for long-term success.
  • Chief Investment Officer: CIOs will be challenged to analyze opportunities across shorter economic cycles; assessing inflation, continued supply chain constraints and maneuvering policymakers. CIOs should focus on new geopolitical challenges to the integrated global economy, corporations’ journeys to net zero carbon emissions and how this shapes investment governance and moving to a quality-over-quantity data mindset.
  • Head of Distribution: With markets remaining volatile for the foreseeable future, performance will be a challenge for many Managers and beyond Distribution teams’ control. Heads of Distribution should focus on enhancing their Client Experience, by scaling and improving service propositions to drive efficiency and minimize costs, harnessing the power of data to win, service and retain clients and continuing to integrate private market offerings within existing operating models to offer multi-asset, whole portfolio solutions differentiated solutions.

Wealth Management:

  • Chief Executive Officer: As asset growth slows down after the exceptional 2021 year, CEOs will go back to revisiting and setting the right strategic focus for their organizations, both in terms of on/offshore markets as well as client segments as to enhance their future growth potential. CEOs should focus on re-focusing/de-risking offshore markets strategies and evolving the ‘offshore WM model’, enhancing and differentiating value propositions by tailoring it to specific client segments/sub-segments and increasing sales effectiveness by augmenting the Relationship Manager through data and advanced analytics including AI.
  • Head of Compliance: Heads of Compliance need to pursue efforts to achieve better results. They should focus on identifying ways to adequality support business growth while maintaining risk levels, getting leaner organization without compromising Risk and Compliance frameworks and understanding and exploring the benefits of new technologies such as web3.

Alternatives:

  • Overall: Demand for alternatives will continue to increase, presenting challenges for traditional managers looking to incorporate alternatives capabilities alongside their existing strategies, and for alternatives providers looking to scale their operations and meet demand. Additionally, those that provide alternatives strategies to institutional clients will look at new ways to distribute their products to intermediaries and individual investors, requiring increased scale & efficiency.
  • Private Credit: Demand for Private Credit is set to continue growing in 2023, with traditional capital providers less willing to lend in the current environment. Private Credit managers should focus on maintaining a compelling investment pipeline to attract investors in an increasingly competitive GP landscape, scaling the business without impacting returns or adding proportionately higher operating costs and adopting better data and technology practices to enhance the investor experience.
  • Private Equity: Private Equity faces fresh challenges in 2023, as tightening global monetary policy increases the cost of capital – the lifeblood of an industry that continues to mature. Industry leaders should focus on understanding drivers of excess return and product differentiators amidst turbulent markets, implementing successful ESG and Responsible Investment strategies and building firm and fund operating models at scale across AUM and multiple investment strategies.

To read the full Asset and Wealth Management 2023 Outlook, click here or visit www.alphafmc.com for more information.

About Alpha FMCAlpha FMC partners with today’s leading asset and wealth managers to think smarter and shape their businesses for the future. The Alpha team has worked with all of the world's top 20 and 80% of the world's top 100 asset managers by AUM, comprised of more than 900 global consultants operating from 16 client-facing offices spanning the UK, North America, Europe and APAC. Alpha shapes the industry by delivering expert knowledge and advice in critical business areas such as new generation operating models, digital transformation and new regulation management.

Visit www.alphafmc.com for more information.

Media Contact: Madison Thomas mthomas@wearecsg.com 303.868.1220

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