Asset Managers

Asset managers worldwide have made little notable progress in achieving their sustainability goals since 2021. Particularly in the United States, parties are becoming less inclined to persuade companies in their portfolios to move away from fossil fuels.

Investment managers are shifting fund investments towards Exchange Traded Funds (ETFs) at the expense of traditional mutual funds. The shifts are clearly visible both in Ireland and Luxembourg, Europe’s two leading hubs for ETFs, according to insights from LSEG Lipper. BlackRock was the biggest-selling fund promoter in the first half, accounting for more than half of all European ETF inflows.

After a substantial rally, Artificial Intelligence (AI) stocks are still reasonably valued, according to Johannes Jacobi, an AI specialist at Allianz Global Investors. In a conversation with Investment Officer Belgium, Jacobi emphasized that from an investment perspective, the valuations remain favorable, while other sectors are yet to catch up.

In the wake of a sturdy first half characterised by ebbing inflation, stellar tech-driven stock market performance, and soaring bond yields, economists and investment strategists predict a reduced recession risk for the latter half of 2023, a survey by Natixis Investment Managers shows. “Recession is still a real possibility, but most expect a softer landing,” said Mabrouk Chetouane, head of global market strategy at Natixis IM.

As pressure mounts on investors to allocate larger portions of their portfolios to alternatives, Stuart Dunbar, a partner and director at Edinburgh-based investment manager Baillie Gifford, stresses the need for careful consideration. He highlights the limited supply of high-quality opportunities as a critical factor. “We can’t just rush into the alternatives.”

The Luxembourg District Court on Tuesday ordered the dissolution and liquidation of 23-year old investment firm Fuchs & Associés Finance SA and appointed a liquidator and an official receiver. Luxembourg’s financial supervisor CSSF, noting “serious breaches of essential legal and regulatory requirements,” said it has revoked the firm’s authorisation to operate as an investment services provider and has activated the Grand Duchy’s investor compensation scheme.

Hopes in the commercial real estate sector that central banks would lower interest rates due to declining inflation have been dashed. Interest rates are staying high for longer, causing problems, particularly for those who borrowed heavily during the market boom to fuel growth and who now face the burden of refinancing their debt.

The European Fund and Asset Management Association (Efama) has declared that the European investment fund sector is not capable of undermining financial stability to the extent that it results in systemic risks.

Accountancy firm PwC’s latest global asset management survey predicts a Darwinian industry shake-up, forecasting that one in six asset management firms worldwide will disappear by 2027 amid looming consolidation and technological disruption. “The choice is simple – adapt to the new context or fail.”