Financial Markets Legal

Update Amsterdam

Asset Management 2025

23 May 2019

Waheed Aslam – Senior Lead, Asset Management & Investment Funds

Andy Hartwill – Client Insights

The Future of the Asset Management Industry

Setting the scene

Demographics

The results

What next

3

Market context

4

World is Saving Less – Again!

22.0

22.5

23.0

23.5

24.0

24.5

25.0

25.5

26.0

26.5

27.0

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

World Savings as % of GDP

Source: The World Bank

5

Who Are The Respondents? Seniority

8%

16%

24%

27%

24%

0%

5%

10%

15%

20%

25%

30%

Owner C-Suite Other SeniorManagement

Middle Management Professional

Who Are The Respondents? Job Function

41%

9%7%

0%

10%

20%

30%

40%

50%

PortfolioMgt

Research GeneralM'gt

Legal Compliance Finance Sales/Mktg Dealing/Ex'n

Human Res I.T.

Who Are The Respondents? Location

54%

28%

14%

0%

10%

20%

30%

40%

50%

60%

Europe Americas APAC MENA SSA

Who Are The Respondents? : AUM ($)

14%

18%17%

0%

5%

10%

15%

20%

Below $250million

$250 - 499million

$500 - 999million

$1 - 5 billion $6 - 10billion

$11 - 50billion

$51 - 100billion

$101 - 400billion

Over $400billion

Who Are The Respondents? Organisation Type

45%

22%

17%

0%

10%

20%

30%

40%

50%

InstitutionalFund

Manager, e.g.,Mutual Funds,

Unit Trusts

AlternativeInvestment

Fund Manager

PrivateBank/WealthManagementfirm/Family

office

Investment or Retail Bank –Investment

Division

Pensionprovider

Insurance provider –Investment

Division

DevelopmentFinance

Institution

SovereignWealth Fund

The S&S BBG

Asset Management Indicator (AMI)

and Its Components

S&S BBG Indicator Components: Growth to 2025

0.90

0.95

1.00

1.05

1.10

1.15

1.20

1.25

Now 2020 2025

AUM

Fees

Costs

Risk

The Fee Gap

AMI Drivers - Shorter Term (2020): AUM

26.9%

14.4%12.7%

-12.9% -12.4% -12.9%-14.4%

-20%

-10%

0%

10%

20%

30%

POSitive NEGative

28.6%

13.9%

10.0%

-21.2%-18.9%

-24.5%-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

POSitive NEGative

AMI Drivers - Shorter Term (2020): Fees

AMI Drivers - Shorter Term (2020): Costs

19.4%17.7%

11.2%

-15.3%

-12.9%

-19.4%-20.0%

-10.0%

0.0%

10.0%

20.0%

Material Increases Material Cuts

AMI Drivers - Shorter Term (2020): Balance of Risks

18.3%

10.5% 10.5%

-9.3%

-21.1%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

UPside DOWNside

Diversification Strategies to 2020

(Maximise ReturnMinimise Risk)

Diversification by Asset Class (2020)

Simmons & Simmons Bloomberg

13%

20%

8%

-19%-20%

-10%

0%

10%

20%

Diversification by Asset Types (2020)(Alternative Fund Managers/ Organisations)

Simmons & Simmons Bloomberg

15%

10%

-12%-11%

-12%

-20%

-10%

0%

10%

20%

Diversification by Geography (2020) – ALL RESPONDENTS

Simmons & Simmons Bloomberg

10% 10%

13%

17%

-12%

-16%

-6%

-16%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Diversification by Investment Style (2020)

Simmons & Simmons Bloomberg

19%

13% 14%

9%

-6%

-20%

-12%

-23%-25%

-15%

-5%

5%

15%

Diversification by Corporate Action (2020) – ALL RESPONDENTS

Simmons & Simmons Bloomberg

26%

18%

15%

13%12%

12%

3%

0%

5%

10%

15%

20%

25%

30%

New technology Acquisition Culture change Outsourcing Be acquired Merger/ JV Disposal

Investors in EuropeBrexit & Regulatory Impact

Investors in Europe: Brexit Impact 2025

3%

6%

59%

28%

4%

0%

10%

20%

30%

40%

50%

60%

Very POS POS Moderate NEG Very NEG

Investors in Europe: Risks from EU Competition Law

2%

10%

43%

30%

15%

0%

10%

20%

30%

40%

50%

Very High High Moderate Low Very Low

Investors in Europe: Regulatory Intervention (Q45)

-25%

-1%

5%

34%

5%

-17%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Fee levels Type of fund:active/passive

Benchmarks Transparency Fund structures Tax

Main People Issues (for C-Suite ++)

27%

21%

17%

8%

6%5% 4% 4% 4%

3%1%

0%0%

5%

10%

15%

20%

25%

30%

Asset Management 2025

Contact your usual Bloomberg rep or email me on

Waheed.aslam@simmons-simmons.com

Simmons & Simmons Bloomberg

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