By Wim Ritz, Global Head of Funds at ZEDRA.
1. ESG
As humanity accelerates its response to the Climate Crisis, an awareness of ESG issues has crept into every aspect of our lives and fund managers will be pushed towards ESG by increasing investors’ demand.
2. UK
They have always pushed for more liberal financial markets and played the card of being the intermediate in financial transactions. Now that the UK is free again to rule the waves, they will reposition themselves and will ambition to take up the role similar to Singapore in front of Europe’s shores. A new UK “holding-regime” legislation is in the pipe-line and more initiatives to be expected.
3. Digital Assets
Crypto has become a more mainstream asset-class with also institutional investors allocating part of their funds. Crypto has also become more accessible to all, with high volatility causing shock-waves in the private savings area. That will trigger more regulation focussed on investor protection, anti-money-laundering and efforts to tax revenues from crypto-investing. The OECD will come with an initiative.
4. The Great Resignation will continue
Many people have gained a clearer idea during the pandemic of what type of work environment they prefer and considered switching jobs if their current position doesn’t support their well-being. This will accelerate the push of funds and administrators towards more digitisation and robotisation, in order to eliminate the unpleasant and mind-numbing activities for staff, while achieving large-scale efficiencies at the same time.
5. Alternatives no longer alternatives
Investors face high valuations in many growth markets, combined with rising yields and diminished diversification benefits from core bonds, and the potential for inflation running above recent trend levels. This appears likely to encourage all types of investor to make larger, more diverse allocations to alternatives, liquid and illiquid, as well as assets that can mitigate the impact of transitory and secular inflation, such as commodities and real estate. Individual investors may have the ability to make the most notable move, as private equity and debt products become more accessible to them. More funds will be set-up in the form of “unregulated funds”/”partnerships” who will become mainstream.
