Today, independent asset managers/family offices manage in the range of 5% of the region’s wealth in Hong Kong and Singapore. Industry leaders predict that this figure will double in time, but also acknowledge that key challenges remain. Notably, the fees for advice model remains a tough sell to clients who are used to receiving free advice, and firms that are unable to charge 100 bps on assets managed must rely on alternative fee structures to generate revenues in a difficult market environment. Add in regulatory uncertainty – particularly with regards to the use of retrocession payments – and achieving profitability as an ‘independent’ player is today a tall order. This panel confronts the key hurdles facing IAMs in Asia and asks what concrete steps can be taken to increase their share of the region’s AUM in a profitable manner.

European bank balance sheets doubled in the decade prior to the financial crisis. This led to a sharp expansion of non-performing loans in the following years as the European economic recovery failed to materialize. Continued quantitative easing and an enhanced regulatory framework may compel European banks to recapitalize and dispose of non-performing loans. The refinancing requirements of debt issued pre-crisis, coupled with the record level of CCC debt issued post-crisis, points to a growth in stressed and distressed credit opportunities in Europe. Fallout from the UK’s vote to leave the EU has led to increased uncertainty and price volatility, enhancing opportunities to acquire mispriced assets.

M&G discusses the changing landscape for asset managers globally. Focusing on the key catalysts of change; the GFC, regulation, demographics and the use of technology in distribution, the session stresses the need for the industry to evolve its product proposition and distribution strategy for today’s demanding global client set. Calling upon experience of emerging distribution trends from across the world, the workshop will share M&G’s experiences from intermediary and client consultations since the GFC, and explain how changing behaviours are drastically changing the traditional manufacturing and consumption of financial products.

Lower returns, sustained uncertainty and bouts of turbulence are the new norms of investing in a world where economies are undergoing structural transformation and central banking policies are moving into unchartered territories. Sole dependence on liquid capital markets or plain vanilla long-only instruments will unlikely generate sound returns without taking on excessive risk. By one account, a portfolio in 2004 could generate 4% returns with 85% and 15% allocated to fixed income and equities, respectively. Today, half a portfolio would need to be allocated to equities to achieve the similar gains but with double the volatility. Consequently, global investors are actively allocating to alternatives – whether through hedge funds to diversify away from pure long-only exposure, or via private equity. Indeed, the demand for private equity among Asian HNWIs – and especially Chinese investors – is vigorous as ever. IAMs looking to offset a slowdown in flow trades and to help clients achieve attractive risk-adjusted returns are today seeking out alternative solutions. And with critical mass and truly open architecture platforms, IAMs have both the access and capabilities to create a platform with breadth and independence. This panel explores how IAMs are meeting client demand for alternative strategies, and how clients are reacting to IAMs’ initiatives in this space relative to the offerings of incumbent global financial players.