Despite significant improvements in the global economic landscape in the intervening years, global growth was hampered in 2015 by various geopolitical factors, including a slowdown of economic activity in China and weakening energy and commodity prices. In the UK, the prospect of the referendum on membership of the EU in June 2016 created an uncertain political environment. The impact of the UK’s decision to leave the EU is expected to be significant, in particular for the UK and across the European continent but also more widely.
The activities of the financial services industry remain squarely in the public and regulatory eye, and the consequences of this focus are manifest in ongoing regulatory attention around the globe. Regulators are continuing to seek to address perceived systemic risks and preserve market stability through regulation.
It is not only regulators who continue to place additional demands on the financial services industry in the wake of the financial crisis; the need to rebuild trust has led investors to call for greater transparency around investments and risk management from those managing their funds. Industry bodies have noted further moves away from active management into passive strategies, illustrating the ongoing pressure on management costs.
The increasing impact of technology on the industry has also been observed, including developments such as ‘smart beta’ management strategies and the nascent emergence of automated (or ‘robo’) advice services.
This continues to be a period of change and uncertainty for the asset management industry, as funds and managers act to comply with regulatory developments and investor requirements and adapt to the changing geopolitical landscape. Although the challenges of regulatory scrutiny and difficult market conditions remain, a return of risk appetite has also evidenced itself. The industry is not in the clear but, prone as it is to innovation and ingenuity, it seems well placed to navigate this challenging and rapidly shifting environment.
The world of asset management is increasingly complex, but it is hoped that the fifth edition of The Asset Management Review will be a useful and practical companion as we face the challenges and opportunities of the coming year.
Paul Dickson is a partner at Slaughter and May with a broad corporate and commercial practice. He has experience of advising clients on a wide range of corporate matters, including in the field of asset management, as well as on M&A transactions, private acquisitions and disposals, and joint ventures and partnership structures.
The publisher acknowledges and thanks the following for their learned assistance throughout the preparation of this book: