The Dutch asset management industry is facing a period of consolidation, with managers having to invest heavily in new technology and seek out niche markets – or move abroad – to survive, according to PwC.
Drawing conclusions from a report on the future of global asset management, Arthur Kilian, head of asset management advice at PwC Netherlands, said offering tailor-made solutions to customers would be crucial for asset managers wishing to ensure their existence in the coming decades.
Frank van Groenestein, lead partner at PwC’s asset management practice, said: “Following an earlier trend towards investment through vehicles in Ireland and Luxembourg, we now notice that more and more Dutch assets are managed by foreign asset managers, such as BlackRock, which has greatly expanded its services in the Netherlands.”
He also cited Robeco, which is now Japanese owned.
PwC’s global survey suggested that the position of asset managers in the market would become increasingly important, and that they could even take over services from banks and insurers.
At the same time, he predicted that shrinking margins, increasingly demanding and mobile clients and ever-evolving legislation would put more pressure on the sector.
PwC forecast an annual growth of 6% for global pension assets, rising to €40trn by 2020, as well as a shift towards alternative asset classes.
Although the consultancy said it expected to see most growth in South America, Asia, Africa and the Middle East, it said Europe would remain the second-most important region – after North America – with assets under management of €10trn by 2020.
Kilian said asset managers’ success would be increasingly determined by their ability to meet clients’ needs, and the range of products they offered.
He said this applied in particular to rising demand for alternative investments, adding that the deployment of new technologies would be a top priority.
“Improved deployment in current systems and improved organisation of data management, as well as reporting structures, will become increasingly important to comply with regulation, simplifying organisations and driving down costs,” he said.
Kilian said that this would be of particular importance to managers offering ETFs and other passive products.
PwC predicted that asset managers would increase their product ranges in primary lending and secondary debt market trading, including distressed and non-performing loans, primary secondaries and off-balance-sheet financing.
It also expects a considerable increase in passive investments, driven by demand from institutional and retail investors.