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The new year has commenced with a cautious outlook, influenced by significant domestic and trade policy changes in the United States under the new administration, coupled with intense geopolitical fragmentation. The S&P 500 has declined by over 10% since the beginning of the year, following two consecutive years of returns exceeding 20% in the US markets. Market volatility is expected to remain high this year as it adjusts to the new normal.
Amidst these developments, the rise of artificial intelligence continues to demonstrate its potential to transform the financial services industry. Consequently, forward-looking asset managers are increasingly focusing on driving innovation and efficiencies in their front- and middle-office functions to leapfrog competition and generate operational alpha.
In this context, we are pleased to present our latest perspectives aimed at assisting global asset managers drive profitable growth.
Chanakya Dissanayake, Managing Director, Asset Management
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Market Insights |
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In 1Q 2025, the combined AuM of 15 large asset managers remained steady at ~$47.6T, signaling a pause in growth momentum since 2022. This came amid declines in global indices—S&P 500 fell 5%, MSCI World dropped 2%—with the U.S. dragging down global performance, partly offset by gains in Europe and Emerging Markets.
Looking ahead, 2Q 2025 may see more turbulence following “Liberation Day” tariffs, which sparked market corrections of over 10%. While markets have largely stabilised, geopolitical risks—especially U.S.-China tensions—remain key. To stay resilient, asset managers are prioritizing cost optimisation, operating model flexibility, and digital transformation—areas where Acuity continues to provide strategic support.
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Watch the expert-led session to explore the evolving landscape of model risk management and how banks can stay ahead of regulatory and technical challenges. |
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Industry Outlook |
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The asset management industry is poised for transformation in 2025, with trends indicating a shift towards increased digitalisation, heightened regulatory scrutiny, and a focus on sustainable investing. |
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Top Reads |
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| Strategies for Ethical Excellence in Asset Management |
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Navigating Global Regulatory Challenges in Asset Management: A CXO's Playbook |
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In light of increasing scrutiny on ethical standards, asset managers are focusing on robust codes of ethics to guide professional conduct.
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This blog outlines key regulatory trends and offers strategic approaches for CXOs to maintain compliance while ensuring investor confidence.
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| Leveraging Alternative Data for Investment Insights |
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Navigating Creditor Conflicts in Debt Management |
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Asset managers are increasingly utilizing alternative data sources, such as satellite imagery and social media trends, to gain a competitive edge.
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Companies struggling to repay debt may attempt to negotiate favourable terms by pitting creditors against each other, leading to legal disputes and financial instability.
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| Mitigating Market Risks in Volatile Times |
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Driving Product Strategy Amid Cost Pressures |
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In the face of market volatility, asset managers are adopting advanced risk mitigation techniques with strategies like diversification, stress testing, and the use of derivatives.
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As the asset management industry faces a changing cost landscape, firms are reevaluating their product strategies. Focusing on cost-effective solutions and aligning product offerings with client needs can enhance competitiveness and profitability.
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| Optimizing Regulatory Document Production |
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Enhancing Client Engagement through Digital Channels |
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Efficiently producing regulatory documents, such as Management Reports of Fund Performance (MRFPs), is crucial for compliance and operational efficiency. Implementing streamlined processes and leveraging technology can reduce errors and save time in regulatory reporting.
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Embracing digital marketing strategies is essential for asset managers aiming to improve client engagement. Utilizing data analytics and personalized content can strengthen relationships and attract new clients in a crowded market.
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What’s new in ESG? |
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| Assessing Climate Risk in Financial Portfolios |
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Understanding Double Materiality in ESG |
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With climate change posing significant financial risks, integrating climate risk assessments into investment strategies is becoming imperative. Evaluating the potential impact of environmental factors on asset performance helps in building resilient and sustainable portfolios.
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The concept of double materiality is gaining traction in the ESG landscape. It emphasizes that companies should report not only on how sustainability issues affect their financial performance but also on how their operations impact society and the environment.
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In the News |
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| How to build careers in the asset and wealth management space |
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Talent Trends 2025: A recruiter’s vision on future skills |
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How digital Transformation is driving a Change in Service Delivery |
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Tech Corner |
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| BEAT RFP pulse |
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BEAT EDGE |
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Reinvent your RFP and DDQ response process powered by GenAI
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End-to-end consultant database (CDB) update services
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Solutions |
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| Equity Research |
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Risk Solutions |
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Customised equity research services that combine fundamental research with alternate data, ESG and technology-driven insights.
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Bespoke solutions, which blend deep risk analytics and modelling skills, technology capabilities and project management expertise.
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| Seismic Support Solutions |
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Investment Compliance |
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We offer Seismic Support solutions globally, aiding investment managers with LiveDoc creation, LiveSend administration, and predictive analytics.
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Leveraging technology and domain expertise to enhance the capabilities of the investment compliance function and enable teams to manage reputational and financial risk.
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Case studies |
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| Achieving 15% Cost Reduction for a Trillion-Dollar Asset Manager |
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Reducing Compliance Time by 25%, Improving RFP Efficiency by 30% for a Global Asset Manager |
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Delivered end-to-end operational support to a US-based trillion-dollar asset manager, driving improvements across key functions.
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Provided comprehensive support to a global asset manager in managing compliance, RFP, and ESG functions.
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ABOUT ACUITY KNOWLEDGE PARTNERS
Acuity Knowledge Partners (Acuity) is a leading provider of bespoke research, data management, analytics, talent, and technology solutions to the financial services industry, including asset managers, corporate and investment banks, private equity and venture capital firms, hedge funds and consulting firms. Its global network of over 6,000 analysts and industry experts, combined with proprietary technology, supports more than 650 financial institutions and consulting companies to operate more efficiently and unlock their human capital and transforming operations. Acuity is headquartered in London and operates from 16 locations worldwide.
Acuity was established as a separate business from Moody’s Corporation in 2019, following its acquisition by Equistone Partners Europe (Equistone). In January 2023, funds advised by global private equity firm Permira acquired a majority stake in the business from Equistone, which remains invested as a minority shareholder.
For more information, please visit https://www.acuitykp.com/about-us/
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US: +1 212 540 9231 | UK: +44 20 7550 4499 | India: +91 80 6113 3000
Sri Lanka: +94 11 235 6000 | Beijing: +86 10 8248 6812 | HK: +852 3002 4980 | contact@acuitykp.com |
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©2025 Acuity Knowledge Partners. All rights reserved. |
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