EUROPE - European asset managers must restore investor interest in actively managed investment and strengthen the resilience of their business models, Fitch Ratings has said.
Fitch said asset managers would particularly need to improve transparency on their products, processes and communication to restore investor confidence in active management.
It said the ability to offer tailor-made and off-the-shelf products adapted to investors' needs - such as moderate absolute return funds, life-cycle, risk-defined or income-generating funds - would be key.
Aymeric Poizot, head the EMEA Fund and Asset Manager rating group at Fitch, said: "Asset managers continue to battle with more volatile capital markets, more demanding and cautious investors, increasing competitive pressures fuelled by the globalisation of the industry and the advent of substitution products."
Fitch said specialist managers seeking to bolster their business models would need more flexible cost structures, which could be achieved through outsourcing and lower break-even points.
Generalist managers, it added, will need to "increase critical mass on core or growing markets", diversifying the investor base and "developing product mixes around all-weather products".