European asset managers will have no option but to adapt to institutional investors' needs by pursuing new trading and structuring strategies instead of offering "standard" investment solutions, according to Fitch.
A study by the ratings agency found that disaffected investors were turning their back on managed products, and that institutional investors were increasingly internalising asset management operations. Fitch said European asset managers therefore needed to review their product offerings and re-shape their activities by strengthening "key areas of expertise".
The Fitch report points out that, in the coming months, asset managers are likely to face "additional concerns", such as portfolios in the low-yield environment being reallocated towards income-generating and global assets, a real problem for managers focused on traditional domestic assets. Cross-border activity is also increasing competition and putting pressure on second-tier players.
The report recommends that asset managers expand into "neighbouring" activities, despite the resources and changes this would entail.
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