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Gill Wadsworth, editor, Institutional Asset Manager

Necessity is the mother of invention and as many of the entrants to this year’s Institutional Asset Manager Awards are well aware, 2023 has continued to demonstrate how the sector is innovating and proffering solutions that allow the industry to progress in volatile and challenging times.

The worsening geopolitical fractures in the Middle East and the ongoing conflict in Ukraine continue to add challenges for a sector already contending with fears of recession, persistent high inflation and rising interest rates.

Regulatory pressures – only made more intense by the string of crypto scandals – add to the burden, while the need to keep ahead of the myriad environmental, social and governance (ESG) reporting and disclosure standards is a constant strain.

The institutional investor hunt for alpha outside of traditional asset classes grew bigger again this year, and we have seen more demand than ever for alternatives that offer diversification and long-term returns. Indeed, research suggests that in 2023 alternative investments proved more resilient than their open-ended fund counterparts.

This year we have seen third-party providers emerge as a constant source of support for asset managers and their investors as they navigate these challenges and opportunities, providing technological innovation, and legal, compliance, custody, administration and investment consulting solutions.

Yet those solutions cannot come at any price. Amid gloomy predictions for financial prospects next year – The Deloitte’s Center for Financial Services 2024 investment management outlook survey finds just 10 per cent of asset managers expect significantly better revenue prospects in the coming year – providers need to keep their costs low while simultaneously streamlining their clients’ operations and introducing cost-efficiencies.

This has proven a common theme for successful entrants to this year’s Institutional Asset Manager Awards who say that helping firms contend with an increasingly competitive and cost-conscious marketplace has been a commercial imperative, and will continue to be so next year.

Keeping up with investor expectations is another critical component for 2023’s successful financial service providers. Getting to know investors is becoming ever-more important for asset managers, and support with data gathering and analysis has been a key focus this year.

Irrespective of fears about its use and potential harm, the proliferation of artificial intelligence (AI) has continued apace, as asset managers appreciate its power to transform and streamline operations. Again, this shows no sign of slowing with AI in the asset management market projected to reach USD 11.9 billion by 2030, representing a compound annual growth rate of 24.4 per cent.

While the threat from AI bubbles under the surface, the very immediate damage from lapses in cyber security continues to hold the financial service sector’s attention.

A single cybersecurity breach is estimated to cost firms an average USD4.45 million, while the US Securities and Exchange Commission’s (SEC) new rules on reporting these incidents giving two major incentives of the industry to keep cyber security firmly on the agenda next year.

Finally, the move to shorter settlement cycles has been a major event this year, particularly for those trading the US, and T+1 continues to occupy organisations’ attention as they approach the SEC’s May 2024 deadline.

We would like to congratulate all the winners in this year’s awards and thank all the organisations that took the time and effort to enter. Importantly, we look forward to bringing you more news and events from this fascinating industry in 2024.