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The macro trends forcing change on the investment management industry


David Teten

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The peculiar investment management industry
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Katina Stefanova

Katina Stefanova is CIO and CEO of Marto Capital, a multistrategy asset manager based in New York that creates customizable investment solutions for institutional clients.

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The peculiar investment management industry

Power in the investment management industry is shifting to the money holders from money managers, driven by several major economic, social and political trends.
Collectively, these are irresistible forces meeting a moveable object: the traditional asset management industry structure. Below are five key trends impacting the investment management industry.
A new group of underserved customers
Women in the U.S. are expected to control as much as $30 trillion in assets over the next three to five years, and millennials $20 trillion by 2030. The new decision-makers will expect the industry to reflect better gender balance and be more accessible.
Women and millennials tend to invest differently than the past generation of older men. Millennials are both more risk averse and more socially conscious when selecting investments. In addition, because they came of age during the financial crisis, millennials have a negative perception of some of the traditionally dominant financial services companies. The change in the values of the investor base helps explains the popularity of ESG investing.
Image Credits: BCG Center for Sensing and Mining the Future
Additionally, allocators are becoming a lot less tolerant and unwilling to turn a blind eye toward toxic cultures of sexual harassment and discrimination, which have been tolerated at some largely male-led investment managers for years. Our view is that as the culture and preferences of allocators change, so will their investment criteria and the tolerance for bad behavior.

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