The shake-out in active asset management is far from finished, even as some firms regain momentum in the battle for investor flows, according to Joseph Pinto, chief executive of M&G Investments.
Large institutional investors are increasingly concentrating mandates with a smaller group of active managers capable of delivering consistent performance, Pinto said, pointing to recent mandates from clients including PGGM and ABN Amro in the Netherlands, ATP in Denmark, Ontario Teachers’ Pension Plan in Canada and CVC Capital Partners.
“Not everybody is a good active manager,” Pinto told Investment Officer. “Some are losing assets because they have not delivered on the promise they made to their clients.”
The shift reflects a deeper structural change in the industry. Passive funds continue to dominate global equity flows, but Pinto argues that a smaller group of active managers is still able to win market share.
“Active management as a category is probably smaller than it was twenty years ago,” he said. “But the managers who deliver consistent performance will be the big winners.”
Turnaround
That dynamic is reflected in M&G’s own turnaround. The firm reported 7.8 billion pounds of net inflows in 2025, reversing 1.9 billion of outflows the previous year, with asset management accounting for most of the recovery.
Pinto attributes the improvement to a strategy introduced several years ago that focused on strengthening investment teams, expanding private market capabilities and building a broader international distribution platform.
“We built on strong investment performance, reinforced the teams and invested heavily in distribution,” he said. “The inflows you see today are the result of three years of hard work.”
The mandates cited by Pinto illustrate how institutional investors are consolidating relationships with fewer managers while allocating across multiple strategies.
“It’s not a one-product story,” he said. “Some clients bought private equity, others real estate, others structured credit or emerging market equities. It’s the breadth of strategies that makes the model work.”
Private credit scrutiny
Private markets are playing a growing role in that strategy, particularly private credit and structured lending.
But Pinto dismissed suggestions that the rapid growth of the asset class poses systemic risks, especially in Europe.
“Our default rate in private credit is about 1.1 percent,” he said. “We are extremely cautious and have been operating in that market for more than twenty years.”
He also stressed the structural differences between European and US credit markets. Leverage, for example, is very common there and much less so in Europe.
“The private credit market in the United States is very different,” Pinto said. “Europe is still largely bank-led when it comes to lending to mid-sized companies.”
That structure, he argues, creates a more stable environment for credit investors.
“In Europe the market is probably more sound,” he said. “But we live in a global world and there are interconnections. I would not say there is no risk.”
Geopolitics and markets
Beyond credit markets, geopolitical tensions are emerging as another source of uncertainty for investors. The escalation involving Iran has pushed oil prices higher and revived concerns about inflation and interest rates.
For now, Pinto said institutional investors appear cautious rather than alarmed.
“There is no real panic at this stage,” he said. “Investors have learned from the past not to take urgent decisions in volatile markets. A year ago the tariff issue pushed markets down massively. Whoever was out and missed the rebound missed the whole performance of last year.”