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Majority of asset managers face challenges with distribution-related data, says State Street research

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Sixty four per cent of asset managers plan to launch cross-border products in the next five years, however, the vast majority (88 per cent) see distribution-related data as a challenge in achieving this, and believe the pace of change is only accelerating.

That’s according to the latest State Street 2018 Fund Strategy Survey of 250 asset managers globally, analysing how they are developing cross-border strategies, including the factors influencing their choice of fund vehicle, passport and domicile location. More than half (57 per cent) are worried about new entrants from the world of technology.
 
Asset managers are also planning to expand their product suite into more complex asset classes during the same timeframe. Based on State Street’s research, 85 per cent are planning to offer hedge funds, a 15-per cent rise from today; 83 per cent plan to offer real estate funds, a 13-per cent increase from today; and 83 per cent plan to offer private equity funds, a 24-per cent rise from today.
 
“Whether it is alternative investments, UCITS or cross-border mutual funds, investment in technology will become critical for asset managers to efficiently deliver products to their clients,” says Liz Nolan, State Street’s chief executive officer for EMEA. “As the world continues to innovate, the blurring of lines between man and machine will persist, and emerging technology such as artificial intelligence will be of increasing importance for asset managers to achieve their ambitious goals for growth.”
 
“The access to distribution data remains a challenge for the asset management industry. According to our survey clients are looking for a flexible, scalable information technology infrastructure that ensures a fast and accurate delivery and execution throughout the investment lifecycle,” says David Suetens, head of State Street Luxembourg. “Additionally, as asset managers expand their product suite and the number of markets their products are distributed to, they are also becoming less dependent on intermediaries; with nearly half (44 per cent) expecting to increase their volume of direct sales. The effect of regulatory reform and technology may thus change the nature of distribution of funds.”

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