Time turns everywhere – even in the asset management industry

03.01.2017 Krise & Wandel von Carsten Böhme 

2016 will leave several traces in history books: the attack on the Christmas market at the Berlin Memorial Church was the sad ending in a significant year from a German perspective. Brexit, Trump, Aleppo – historical events, whose significance will only truly be revealed in the future. Whether we are experiencing a turning point for the worse remains to be seen, but it certainly has implications in our minds, our actions and our communication.

The feeling of a turning point in time exists in world politics and economy. Rarely so many industries have faced as many substantial changes as they do today, with corresponding consequences for companies, employees and customers. The energy giants could lose their power, the banks their investment banking – and numerous branch offices as well. Hotels argue with Airbnb, taxi drivers with Uber. The retail market is increasingly giving market share to the Internet, insurance brokers to fintech. While some elude old rules with new offers and processes, others try to follow suit or to repoint the status quo.

And the asset management industry is not to be excluded. On the contrary: troubled times lie ahead, while equally, everything seems possible. However, the signs of the time must be recognized correctly. Passive funds are gaining market shares and are pushing prices, active funds are being scrutinized in the media and regulators. Where is the alpha? As a result, margins are falling but new suppliers are still coming to the market. So can it be that bad? The industry has simply grown up: it is global, powered by technology and increasingly separated from the parents’ banks and while maintaining decent margins and professional customers.

Accordingly, it is now necessary to act consistently. A clear positioning in the market should be identified and taken, suitable for the funds’ own USPs. This includes the systematic establishment and protection of reputation. It is relatively easy for focused specialists: they only have to follow their path consistently, live it and communicate, increasingly internationally and appropriately. Quality is in the foreground for Carmignac, DJE or Muzinich. For the alleged bigger companies, however, things look a bit different. Size usually means price or sales advantages. However, this is made more difficult by regulation, passive products and demanding customers. Mergers like Janus and Henderson or savings programs could be responses when looking for scale effects. Both are complicated change processes, which must be communicated internally and externally.

The latent feeling of a turning point in time is accompanied by a growing demand for communication in all areas. If you do not want to get stuck in politics and the economy, you have to make your voice heard with your own messages, with good content and emotion. This requires a large portion of empathy - and a good understanding of the rapidly changing media world.

# Asset Management # Crisis # Change