Institutionalizing Your Organization

With the growth of global markets and proliferation of different kinds of instruments and assets, launching and running a successful & profitable asset management business particularly in the absolute return space has become increasingly challenging. This is partially owing to an increasing number of asset managers chasing the same set of returns which reduces the possibility of delivering consistent non-beta returns in the long run.

One game changer is the fact that a lot of what was considered “alpha” and was relatively expensive (e.g., trend-following) back in the day is now considered beta and can be acquired cheaper. In the meanwhile, institutional investors have become more sophisticated and not only do more in depth due diligence and expect “good performance”, but they also expect managers to step up by delivering these returns for cheaper alongside enhanced governance, risk and strategic alignment.

In that sense, having a robust idea generation is no longer sufficient. The asset manager of the future is one that can align themselves with their investors and bring zero headline and reputational risk to its investors as the more recent FTX debacle has shown to the whole world.

This is a survival of the fittest environment, particularly given the rocky markets where delivering non-negative and uncorrelated returns within a strong governance have become more important than ever. The successful asset manager of the future will be the one that not only delivers consistent unique returns and risk-adjusted returns but will have institutional governance, risk and front office functions that is overlaid by an ESG perspective that will be able to withstand not just investment but also ESG and operational due diligence.

Please connect with us to discuss our solutions to institutionalize your asset management business in more detail.