ASSET MANAGEMENT MOVES INTO THE SPOTLIGHT

$56.5 trillion globally within the next five years, a 6.6% annual growth 3 . Assets of SWFs are set to rise from$5.2 trillion to nearly $9 trillion globally over the next five years, a 7% annual growth. During the past decades, the asset management industry has won a notable portion of institutional clients' assets. Going forward, however, asset managers must adapt to the needs of these investors in the areas of investment performance, risk management, compliance and reporting if they hope to leverage this opportunity. The increasing importance of long-term funding casts asset management expertise into the spotlight. Asset managers will therefore, have to clearly demonstrate the benefits they can offer by becoming adept at mobilising long-term investors throughmeeting their needs with tailored solutions. Furthermore, winning the trust of these investors will be critical in our post-crisis environment. The digital era is changing the way investors and other key stakeholders of the industry access information and evaluate investment opportunities. Entering thedigital erawill allowasset managers to scale up operations, increase insights, improve investor targeting and stand up to potential competition from high-tech companies. Additionally, big data will play an important role in the future of asset management. Data analytics has become a highly specialised field that can optimise investing and help asset managers comply with regulations through more accurate reporting. EntEring thE digital Era

These opportunities do not, however, come without substantial effort. To leverage on wealth of information stored withinmost asset management firms, asset managers will have to rethink their operational capabilities and consider partnering, when appropriate, with the high-tech sector to deliver enhanced service to their clients. The current state of affairs gives rise to several pressing questions: can the asset management industry develop the necessary capabilities to seize these opportunities? How should the industry be regulated in the new economy? Will it be able to provide innovative solutions that meet the needs of governments and the economy?

3 PwC, "Asset Management 2020", 2014

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