48% of US asset managers mark availability of capital as top risk

Written by Adam Cadle

23/08/2024

Forty-eight per cent of US asset managers have marked the availability of capital as their top risk, with interest rate uncertainty ranking second at 37%, according to KPMG.

KPMG’s Asset Management Industry Pulse Survey also revealed that most respondents (63%) anticipate the Fed will start cutting rates in the second half of 2024, while 37% believe it will wait until 2025 or later.

Respondents expect private debt (43%) and private equity (35%) to remain the top asset classes for ROI over the next three years.

Despite the increased media coverage around GenAI, US asset managers are proceeding cautiously. Forty per cent are in the conceptual phase, 25% are developing capabilities, and nearly a third haven’t started. Less than 5% have a clear strategy. The primary barriers to AI adoption are data integrity risks (60%) and lack of awareness and training (53%).

“The asset management landscape is marked by compound volatility, with immediate challenges like interest rate uncertainty and capital deployment creating significant pressure,” said KPMG’s US sector leader for asset management, Greg Williams.

“To thrive in this environment, asset managers must adopt a forward-thinking approach to their strategy, including their plans for GenAI, that is comprehensive of overall risks and operational needs so they can effectively manage both immediate concerns and future growth opportunities.”

KPMG conducted the survey in July 2024 (prior to the July 30-31 Federal Open Market Committee meetings), to obtain insights on both economic and strategic initiatives heading into 2024. Responses were collected from more than 120 asset management professionals in the US, primarily in c-suite and board roles. These professionals represented private fund managers, traditional fund managers, publicly traded entities, and institutional investors, investing across various asset classes including real estate, hedge funds, private debt, and private equity; a majority with $2.5 bn or more in AuM.

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