Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. ECONOMY
December 10, 2014 12:00 AM

Moody's: Large managers will benefit in 2015 from market conditions

James Comtois
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The largest money managers will benefit from benign market conditions in 2015, said an outlook report released Wednesday by Moody’s Investor Service.

    “Scale is driving growth for the largest managers,” said Neal M. Epstein, a vice president and senior credit officer at Moody’s and co-author of the report, in an interview. “The ones with the largest distribution reach, the ones with the most capital and most able to innovate, will see a competitive advantage in 2015.”

    The conditions that will serve the asset management industry in 2015 include the paradigm shift to passive strategies from active; the growing popularity of liquid alternatives funds, private equity and factor-indexed exchange-traded funds; and increasing regulatory oversight.

    Moody’s report states that the growing distinction that investors make between active and passive strategies has caused managers to invest in new strategies that meet the demand for a widening palette of attributes, whether in alternative vehicles, multiasset formats or factor-oriented indexes.

    Liquid alternatives funds, private equity and factor-indexed ETFs are other areas of rapid growth. Moody’s predicts net inflows of $49 billion to liquid alternatives funds in 2015 driven by institutional investors, which traditionally invest in illiquid hedge funds.

    Strong returns are encouraging investors to commit more assets to private equity firms and institutional investors are now favoring smart-beta strategies over traditional, cap-weighted passive strategies, the report said.

    “For institutional managers, there’s an increasing interest in hedge funds, in mixing passive and active products, in using non-traditional benchmark products,” Mr. Epstein added in the interview. “And the interest in these products is driving the accelerated growth for larger managers, because these larger managers have the means to develop these products.”

    Regulatory oversight is also increasing across the financial services industry with greater focus on the asset management industry; money market funds are one example of strategies under pressure.

    The largest managers are most competitively situated to address these challenges, according to Moody’s. Regulatory focus on risks of scale and concentration might result in new layers of oversight, including reporting and stress-test requirements.

    The report said these market trends should support greater concentration of the asset management industry in 2015, especially where size enables managers to invest capital in new strategy development, interface with large distribution partners, enter new regions and address rising challenges from restrictive regulations

    The report noted, however, that market disruptions or unexpected occurrences, such as key-man departures, strategy failures or regulatory hurdles, could weaken scale advantages.

    Related Articles
    BofA: Managers optimistic on global equities
    Managers pessimistic on credit defaults, survey finds
    Money managers tame their expectations on the economy, survey shows
    Reins pulled back on expectations for the economy
    BofA: Managers more confident in global growth, Japanese equities
    KBW report: Global and institutional managers to benefit most in 2015
    Natixis survey: Investors look to public equity for best performance in 2015
    BofA: Managers boost cash holdings, pull back U.S. equity, commodity holdings
    Aksia: Hedge fund managers optimistic about equity markets for 2015
    NEPC: Foundations and endowments optimistic heading into 2015
    Managers with good returns, outperformance charge lower fees — bfinance study
    Moody's: BlackRock dominates public managers in AUM growth, inflows in fourth q…
    Commonfund: Investor expectations remain cautiously positive for 2015
    Recommended for You
    Bullard_James_i.jpg
    Fed's Bullard: U.S. recession unlikely, expansion in early stage
    ONLINE_190229980_AR_0_OSATJGPBTGKF.jpg
    Fed's Powell: Soft economic landing 'very challenging,' recession possible
    Powell_Jerome_i.jpg
    Fed hikes interest rates 75 basis points
    New SEC Rule on Fair Pricing Determination Needs Careful Consideration
    Sponsored Content: New SEC Rule on Fair Pricing Determination Needs Careful Consideration

    Reader Poll

    June 6, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Nearing the finish line: Ideas on end-state investing for corporate DB plans
    The Meaning of "Portfolio Intelligence"
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Crossroads: Politics, Inflation, & Bonds
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    June 20, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit