January 3, 2024 — The accelerating pace of change in global investment markets and the institutional asset management industry is forcing asset management firms to reassess long-term strategies and become more flexible in making short-term adjustments to keep their strategic plans on track.

 The asset management business is being transformed by a host of powerful trends, including fee compression driven in part by the rise of index investing, technology innovation and rising client expectations. In the macro environment, it would be hard to overstate the impact that rising rates have had on the industry in just the past two years—especially among corporate pension funds, whose goals and strategies have shifted dramatically with a sharp improvement in funding ratios. Meanwhile, ESG concerns, advancements in digital technology and the emergence of AI are changing the way business and investment markets operate.

 “Historically, traits like agility have not necessarily been associated with asset management service models, but in this new environment of change, managers capable of providing more nimble and flexible service appear to be building a meaningful competitive advantage,” says Todd Glickson, Head of Investment Management – North America at Coalition Greenwich and author of Asset Management: The Agility Advantage.

Asset managers who demonstrate the ability to respond quickly and efficiently to changes in client needs, market developments and customer expectations are outperforming peers in key business objectives. Asset managers who rank in the top quartile in a new Agility Index created by Coalition Greenwich are more likely to be considered for new mandates. Likewise, Coalition Greenwich found a strong correlation between agility and a manager’s likelihood of being considered a strategic advisor to institutional investors.

“To become more agile, asset managers will have to increase the frequency with which they review and revise their three-to-five-year strategic roadmaps,” says Todd Glickson. “Over a shorter horizon, managers will need to develop the ability to respond to new developments more swiftly and implement the course corrections required to keep the company on the path to achieving strategic goals.

Asset Management: The Agility Advantage explains the importance of agility for asset managers in the competition for complex mandates and strategic relationships and offers a series of steps to enhance agility, including adopting client-centric business models, customizing service, product and thought leadership offerings, and harnessing the power of AI.