The past two years have certainly been a challenge for businesses; after the unprecedented disruption of 2020, the optimism surrounding 2021 was palpable. However, despite the hope surrounding a more “normal” 2021, the year ended at more of an equilibrium; an economy resting in balance with a relatively subdued pandemic.
December saw the emergence of the omicron strain of coronavirus, prompting fears that markets were at a turning point. However, as the virus appears to be milder than previous variants, it’s more than likely 2022 will see a continuation of last year’s trends, albeit with ‘less of the same’.
In this week’s blog, we’re exploring the top 5 asset management predictions for the next 12 months.
1. Solid economic footing
Although there are still near-term risks from the pandemic, inflation, and potential central bank policy blunders, most experts agree that the global economy will be more stable in the new year and until 2023. Growth in both developed and emerging economies is projected to be less dramatic than 2021, but it is expected to level off with no sharp dips that might harm businesses.
2. A focus on sustainability
According to a Celent report, ESG (Environmental, Social, and Governance) assets are excepted to top $53 trillion by 2022. The challenge for investors goes beyond simply incorporating climate risk into portfolios – the full balance of externalities accruing through investment decisions needs to be considered by asset managers. A meticulous focus on such details gives businesses certainty that they are investing sustainably – in every sense of the word.
The convergence of digitalisation, globalisation and capitalism will reshape the investment industry by 2022. It is now recognised by financial leaders that international investors – regardless of generation or wealth – want to manage their money in the same way they shop, communicate, and learn; using a variety of digital tools, including social media and mobile applications.
It’s no longer a question as to whether or not the sector will undergo a digital metamorphosis – the challenge for businesses is how they can evolve and avoid being left behind.
Despite its volatility, cryptocurrency is an increasingly important asset in people’s portfolios. We are seeing many firms increase their focus on utilising blockchain technologies to transform transaction processes and improve customer outcomes.
Between 2021 and 2026, the global crypto asset management market is projected to triple in size, growing at a Compound Annual Growth Rate (CAGR) of 21.5%, from $0.4 billion in 2021 to a projected $1.2 billion. Due to this growth, there will be demand for skilled asset managers who can manage crypto-assets for their clients.
5. Eyes on China
Regardless of market crackdowns, China will become key for global asset managers, with international firms eager to enter the country. The Middle Kingdom could account for as much as 40% of global new assets over the next five years.
The success of an asset management firms will be driven by their ability to create a unison of strong leadership, operational improvements, alignment with stakeholder expectations, employee resilience and a strengthened work culture. For all the latest updates regarding Targetfollow’s 2022 projects, visit our Facebook, LinkedIn and Twitter.