Global asset management market was valued at $250.12 billion in 2021, and it is expected to reach a value of $1113.53 billion by 2028, at a CAGR of 23.78% over the forecast period (2022–2028).
Westford, USA, July 13, 2022 (GLOBE NEWSWIRE) -- Growth of asset management market is being driven by a combination of factors. Firstly, global economic growth is resulting in increased wealth and more investment opportunities. This is particularly true in developing economies, where there is a growing middle class with disposable income. Secondly, people are living longer and retirements are becoming more common. This means that there is greater need for financial planning and management in order to ensure that people have enough money to last throughout their retirement years.
Furthermore, the current low interest rate environment means that many investors are looking for alternative ways to generate returns on their savings. Asset management market provides an opportunity to do this through investing in a wide range of assets such as stocks, bonds, property and other investments. Finally, regulation is playing an increasingly important role in the asset management industry. For example, the introduction of the Alternative Investment Fund Managers Directive (AIFMD) in Europe has resulted in greater scrutiny of how asset managers operate and has led to the development of new products and services designed to meet these regulatory requirements.
Asset management firms have responded to this growing demand by expanding their businesses globally and increasing their marketing efforts. They have also been investing heavily in technology in order to improve efficiency and lower costs.
Economic growth and globalization have led to more wealth creation, which in turn has led to greater demand for professional services across global asset management market. Individual investors are becoming more sophisticated and demanding, and are increasingly aware of the importance of diversification and professional asset allocation in achieving their financial goals. Moreover, the traditional banking sector is under pressure from regulatory changes, Basel III capital requirements and other factors, leading many banks to reduce or exit certain businesses, including asset management. This has created opportunities for specialist asset managers to fill the void. The rise of passive investing (e.g., index tracking funds) has made it easier for investors to access global markets and achieve diversification, but at the same time has put pressure on active managers to justify their fees with better performance.
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AI Adoption to Accelerate Growth of Asset Management Market
Adoption of AI in asset management market is still in its early stages, with only a few firms fully implementing AI tools and processes across their organizations. However, there is a growing realization among asset managers that AI can be a powerful tool to help them achieve better performance. In particular, AI can help firms to:
- Improve the accuracy of predictions and forecasts
- Automate decision-making processes
- Identify new opportunities and risks
- Enhance customer engagement
There is no doubt that AI adoption in asset management market will accelerate growth. This can be seen in the way that AI is being used to provide better and more accurate investment recommendations, to automate portfolio management, and to provide better customer service. All of these factors will lead to increased growth in the asset management industry.
• Investment Recommendations: AI can be used to provide better investment recommendations by analyzing a larger amount of data and finding patterns that may not be obvious to humans. This can help investors make better decisions about where to invest their money.
• Automated Portfolio Management: AI can also be used to automate portfolio management tasks such as rebalancing portfolios and executing trades. This can free up time for human managers so that they can focus on other tasks such as finding new investments or providing customer service.
• Customer Service: AI can also be used to improve customer service in the asset management industry. For example, chatbots can be used to answer customer questions or guide them through the process of making an investment decision.
AI adoption will continue to accelerate in the coming years as more asset managers recognize the potential benefits of using AI. In order to fully reap the rewards of AI, firms will need to invest in developing the necessary infrastructure and capabilities. This includes building up data capabilities, hiring talent with expertise in AI/machine learning, and developing an organizational culture that is supportive of innovation.
Booming IT Asset Management to Flourish Asset Management Market
The IT Asset Management (ITAM) industry is booming and is expected to flourish in the coming years. This can be attributed to the increasing importance of effective asset management in today's organizations. As businesses become more reliant on technology, they are realizing the need to better manage their IT assets in order to maximize their return on investment. Asset management is a critical function in any organization as it ensures that all assets are properly accounted for and utilized. An effective asset management system can help an organization keep track of its assets, monitor their performance, and make informed decisions about their use and disposal.
Asset Management Market is Transforming with Latest Technology and Digitization
The asset management industry is constantly evolving as new technologies and digital solutions enter the market. These innovations are transforming the way asset managers operate, providing them with new tools and capabilities to better serve their clients. In the past, asset managers relied heavily on manual processes and intuition to make decisions about where to allocate resources. However, it is now undergoing a transformation as new technologies and data provide greater visibility into how resources are being used and what impact they are having.
One of the most significant changes in asset management market has been the increasing use of data and analytics. By collecting data on everything from weather patterns to energy usage to social media sentiment, organizations can get a much more detailed picture of their assets and how they are performing. This data can then be used to improve decision-making around resource allocation by identifying areas where performance can be improved or costs can be reduced.
Another area where technology is having an impact on asset management market is in the area of automated monitoring and reporting. With sensors and other forms of automation, it is now possible to track asset performance in real-time, identify issues early, and take corrective action quickly. This allows for a much more proactive approach to asset management, which can help avoid costly downtime or repairs.
In terms of digitization, many firms are now offering paperless account opening and KYC/AML compliance solutions. This is making it easier for investors to do business with asset managers, as they no longer need to go through a lengthy onboarding process. Additionally, firms are increasingly adopting digital channels for marketing and client communications. For example, some firms are using social media platforms such as LinkedIn to reach out to potential clients, while others are developing interactive webinars and podcasts that provide valuable information.
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Increased Focus on Risk Management to Remain Key Trend in Asset Management Market
The asset management industry has undergone a significant transformation in recent years, driven in large part by increased regulation and scrutiny. In response, asset managers have placed an increased focus on risk management, which is expected to remain a key trend going forward.
There is no doubt that risk management has become a top priority for asset managers in recent years. The global financial crisis of 2008-2009 highlighted the importance of effective risk management, and the need for asset managers to have a better understanding of the risks involved in their portfolios. In response to this, we have seen a significant focus on risk management within the asset management market.
One key trend that has emerged is the increased use of risk analytics and data-driven approaches to risk management. This is being driven by advances in technology, which are providing asset managers with greater access to data and more powerful tools for analyzing it. Asset managers are using this data to develop more sophisticated models for measuring and managing risk.
Another key trend in the global asset management market is the increased use of alternative investments as a way to manage risk. Alternative investments, such as hedge funds, private equity, and real estate, can provide diversification benefits that can help reduce overall portfolio risk. We expect this trend to continue as investors seek ways to protect their portfolios from market volatility.
Impact Investing is Becoming Increasingly Popular Among Institutional and Individual Investors
Impact investing is becoming increasingly popular among institutional and individual investors across global asset management market for a number of reasons. First, it provides investors with the opportunity to generate both financial returns and positive social or environmental impacts. This combination of financial and social return is often referred to as "double bottom line" or "triple bottom line" investing.
Second, impact investing is seen as a way to address some of the world's most pressing problems, such as poverty, climate change, and gender inequality. As more people become aware of the scale of these problems, they are looking for ways to invest their money in companies or projects that will have a positive impact on these issues as well as overall asset management market.
Third, there is an increasing body of evidence that suggests that impact investments can be profitable. A number of studies in the asset management market have shown that companies with strong social and environmental performance outperform their less sustainable peers over the long term. This outperformance is often due to lower costs (e.g., from energy efficiency), higher employee productivity, reduced risk (e.g., from regulatory changes), and increased customer demand (for products or services that are perceived as being more socially responsible).
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Acquisition is on the Rise in Asset Management Market
According to a recent study, firms in asset management market are expected to see an increase in mergers and acquisitions (M&A) activity over the next year. The study, which was conducted by SkyQuest Technology Consulting, found that 68% of asset managers expect M&A deal volume to rise in the next 12 months. This is up from just 50% who said the same last year.
There are a number of factors driving this increase in M&A activity across global asset management market. One is the ongoing consolidation within the industry. As larger firms get even bigger, they are looking for ways to grow their market share through acquisition. This is especially true in developed markets such as North America and Europe, where there is less opportunity for organic growth.
Another factor driving M&A activity is the increasing pressure on margins. With competition intensifying and fee compression continuing, many firms are looking to achieve scale through M&A in order to reduce costs. In addition, many firms are looking to add new capabilities through M&A in order to stay ahead of the curve and meet evolving customer needs.
Recent Developments in Asset Management Market
- SCB X Pcl is Planning to Sell its Asset Management Unit valued at $1.5 billion
- Kasikornbank Pcl has been weighing options including a sale of its asset management unit amid interest from potential buyers like Amundi SA, Europe’s largest fund manager
- IFS to acquire Ultimo, an asset management firm
- In July 2022, Georgia RIA is acquired by WA Asset Management for $1bn
- In June 2022, Oaks Asset Management raised $128 million funding
Key Players in Global Asset Management Market
- Brookfield Asset Management Inc. (Canada)
- ABB Inc. (Switzerland)
- Adobe Systems Incorporated (US)
- Honeywell International Inc. (US)
- WSP Global Inc. (Canada)
- IBM Corporation (US)
- Siemens AG (Germany)
- Zebra Technologies Corporation (US)
- Oracle Corporation (US)
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