Two thirds of European institutional investors believe asset management market lacks specialist investment managers

Written by Adam Cadle

26/06/2024

Almost two thirds (64.6%) of European institutional investors believe the asset management market is lacking specialist managers, a new survey published by Fidante has revealed.

Over 65% of respondents agreed specialist investment managers are more agile from the perspective of being able to capitalise on investment opportunities in their given sector than larger multi-asset investment managers investing in the same asset class. Sixty per cent of investors added that the asset management industry is saturated with large multi-asset investment managers.

Furthermore, 83% of respondents indicated they would be more likely to invest in a specialist manager who is supported by a multi-affiliate investment management partner. Cited among the main benefits of the multi-affiliate manager structure was the ability to reduce the investment risk associated with specialist investment managers. The multi-affiliate model is favoured for its potential to reduce compliance and regulatory risks (27.4% of respondents), mitigate ESG and greenwashing risk (26.3% of respondents) and allow managers to concentrate on making informed investment decisions (22.1% of respondents).

Adam Brown, general manager & co-head of global distribution at Fidante Partners, said: "Institutional investors understand the key advantages of specialist investment managers, from their innovative approaches and deeper sector-specific knowledge, to their ability to generate outsized returns. There is a real need to bring new, innovative specialist fund managers into the asset management industry.

“However, investors are acutely aware of risk factors of allocating to specialist managers. Whether that be from ESG and regulatory compliance to the threat of consolidation in the asset management sector. At the same time there is an acknowledgement of the lack of specialist investment management businesses in a market that has become increasingly saturated by larger players.

“Our findings highlight how the multi-affiliate model can provide institutional investors with the confidence to allocate to specialist investment management businesses, whilst offering them a range of potential managers to allocate to. At Fidante, we are offering our specialist investment managers institutional backing and a realm of services such as distribution and operational support, via our multi-affiliate, minority-stake structure. This enables our affiliate specialist managers with the autonomy to invest and deliver for clients."

The survey, conducted in March 2024 by Montfort Communications and FocalData, on behalf of Fidante, sought the views from 229 institutional investors based in the UK, Sweden, Italy, Norway, the Netherlands, Denmark, and Belgium, concerning the specialist investment management industry.

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