Fund managers who oversee at least $5 billion are considering acquisitions in the next 12 months as they seek to expand their multiasset units to create growth, according to a State Street Corp. survey.
About 28 percent of the 300 executives questioned said they view acquisitions as a “major opportunity” to increase product offerings for clients, the survey showed. Sixty-seven percent said multiasset investment strategies will be the biggest contributor to growth in the next three years.
“Asset managers need to transform themselves for a new competitive landscape,” said Andrew Wilson, the London-based head of asset manager sector solutions in the U.K. at State Street. “Firms are under huge pressure to address the capability gap.”
Firms including Invesco Perpetual and Aviva Investors have sought to capitalize on the growing demand for multiasset investing, which is estimated to double in the next five years. Invesco Perpetual hired David Millar, Dave Jubb and Richard Batty from Standard Life Investment in 2012 to form a new multiasset group, while Aviva Plc hired Standard Life’s head of multiassets, Euan Munro, last year to run its investment unit. Munro’s former colleague Ian Pizer also joined Aviva last month.
About a third of respondents said they plan to invest “significantly” in talent in the next three years, while 47 percent said they plan to expand into new countries or regions. Seventy-six percent said changing client demands were leading firms to shift their business strategy.
State Street, the third-largest custody bank, conducted the survey in April and May.