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What Will Differentiate the Asset Management Winners of Tomorrow?

October 2024 – 7 min read

From the rise of private markets to the proliferation of artificial intelligence (AI), the asset management landscape is changing quickly. How can managers stay relevant and competitive in the decade ahead? Martin Horne weighs in.

1. Possibly the most notable trend in asset management in recent years has been the rise of private assets. Can you talk about the interaction between public and private assets and the actions that asset managers need to be taking today to remain relevant in five or 10 years?

Horne: The growth in private assets in recent years is reshaping the industry to an extent. It’s driven an endless number of acquisitions in the asset management space, especially for managers playing catch-up, and has inspired many others to build their origination networks and develop new products, including for the wealth channel, to capitalize on this growth.

What I think is less of a focus, and perhaps this will change soon, is that private assets—like any assets—will go through cycles. Different strategies will go in and out of vogue and performance will vary over time. It’s very possible that parts of the private markets are overheated today and that may result in some pain—but that’s a healthy part of the natural evolution of capital markets.

What managers need to do today if they want to win in the future is not become overly reliant on any given product or strategy. At Barings, for instance, we’re increasingly viewing the world of credit as just that, credit—rather than drawing an artificial line of demarcation between public and private credit. The reality is that the lines are blurring between traditional public and private markets. Yes, there are still differences in things like documentation and issue sizes, but even those are converging to an extent. Importantly, the same underlying bottom-up, fundamental credit underwriting and analysis is needed whether you’re analyzing a broadly syndicated loan or a directly originated one.

Further to that...

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Martin Horne

Global Head of Public Assets, Head of Barings Europe

The document is for informational purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service. The material herein was prepared without any consideration of the investment objectives, financial situation or particular needs of anyone who may receive it. This document is not, and must not be treated as, investment advice, investment recommendations, or investment research.

In making an investment decision, prospective investors must rely on their own examination of the merits and risks involved and before making any investment decision, it is recommended that prospective investors seek independent investment, legal, tax, accounting or other professional advice as appropriate.

Unless otherwise mentioned, the views contained in this document are those of Barings. These views are made in good faith in relation to the facts known at the time of preparation and are subject to change without notice. Parts of this document may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this document is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information.

Any forecasts in this document are based upon Barings opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Any investment results, portfolio compositions and/or examples set forth in this document are provided for illustrative purposes only and are not indicative of any future investment results, future portfolio composition or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this document. No representation is made that an investment will be profitable or will not incur losses. Where appropriate, changes in the currency exchange rates may affect the value of investments.

Investment involves risks. Past performance is not a guide to future performance. Investors should not only base on this document alone to make investment decision.

This document is issued by Baring Asset Management (Asia) Limited. It has not been reviewed by the Securities and Futures Commission of Hong Kong.

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