insight featured image
Increasing regulation, margin compression and investor demands for returns and transparency in a challenging global environment have brought new challenges to the asset management sector.

This is particularly true for change in the superannuation sector, with transparency and performance to be tested annually. This will put pressure on asset managers to not only choose assets that perform well, but that increasingly pass the “pub test” with investors and members. It’s highly likely that asset managers could be swept up in the superannuation review process – particularly when funds are considered to be underperforming.

However, there are millions of dollars in the market looking to be invested. With new kinds of companies and sectors emerging post-COVID, there are also new opportunities for investment. Long term, this will mean much more than technology, data analytics and life sciences.

For instance, shifts in housing market can provide new opportunities. An interesting move by NSW in the 2021-22 Budget was the introduction of incentives to support Build-to-Rent schemes. This is much more widely used in parts of Europe, supported by Real Estate Investment Trusts to incentivise funds and asset managers to invest in residential real estate. Tools like these are the government’s disposal to help address the lack of quality residential retail property in the market. Will certain asset classes be incentivised and subsidised? It’s an issue we’re watching closely.

We’re also seeing new entrants and boutique asset management firms in the marketplace. It’s an interesting time to be in asset management, particularly in terms of investing in other jurisdictions. The flow of capital certainly hasn’t eased, but where it goes and how it needs to be structured is constantly changing. It’s essential to be across legislation and reform agendas in each of the jurisdiction you operate or invest within.

Within this new world, organisations with the operational agility and strong infrastructure to embrace change and innovation can maximise opportunities.