There is definite proof that sustainability-focused funds are outperforming their conventional counterparts. But some experts believe the traditional explanations for this are wrong.
Datamonitor, which expects front office technology spending to top $3.4 billion by 2012, says fund managers are making creative use of technology in the areas of outsourcing fund marketing functions and developing online portfolio distribution channels.
Part of the reason for turning to technology is the downturn in the financial markets worldwide in the early 2000s, which led to a decline in global assets under management, says Amit Shah, a London-based financial services technology analyst at Datamonitor.
That caused the industry to suddenly shift from a high-growth to a low-growth environment forcing fund managers to become more mature in the management of their business in a very short space of time, Shah adds. ôIn a changing market, asset managers are looking to make effective strategic investments in technology to assist them to enhance their product offerings.ö
Fund management companies are finding themselves ôdelicately balancedö between expanding their product set and performance statistics to boost revenues and maintaining operational efficiency at a time of downward pressure on existing margins, Datamonitor says.
This is happening while regulatory bodies are examining existing compliance measures in a bid to further provide security and transparency for investors, the relationship between investment firms and third party distributors is under constant scrutiny, and investors are demanding new products that have the potential to provide superior returns.
The most successful players in the market will be fund management companies that choose to focus on satisfying client needs through advanced technological solutions that integrate real-time performance and risk information into the investment decision making process, Datamonitor says. These market leaders will use alpha opportunities and combine these strategies with customised client-based solutions based on return objectives, risk and time horizons.
To get the clarity they want to make informed portfolio decisions, asset owners and managers must now blend and adapt multiple sources of traditional and non-traditional data to create actionable insights, said speakers at a webinar hosted by AsianInvestor and IHS Markit.
The country's largest insurer Ping An set up a $62 billion green investment target by 2025. Several more players are also joining the hunt for sustainable assets.
The boss of Thailand’s second-largest pension fund hopes that proposed changes in the law will help her diversify more into overseas markets. She is particularly bullish on China.
Investors can still find spread premiums in niche private debt, with the asset class's prognosis looking strong, said a keynote speaker at AsianInvestor’s latest summit on Wednesday.