The growing demand for artificial intelligence has led asset managers to increase their planned investments in data centers, according to a new survey by global professional services firm KPMG released Jan. 30.
Some 40% of survey respondents said they plan to prioritize data center investment over the next two years, up from 27% six months ago, the KPMG 2025 Asset Management Industry Outlook found.
“Data centers have emerged as a cornerstone of modern infrastructure,” said Greg Williams, national sector leader for asset management at KPMG U.S., in a news release issued in conjunction with the survey. “As data centers become a more significant component of real estate portfolios, asset managers must adapt to the unique complexities they present in order to maintain competitive advantage in this expanding market.”
In addition, more than one-third (36%) of respondents expect private debt and credit to remain the top-performing asset class in terms of their return on investment over the next three years, while 31% think private equity will hold the top spot. Real estate was the third-most popular asset class in terms of highest expected ROI over the next three years, chosen by 29% of respondents.
The survey also found that AI maturity is advancing at asset management firms as these organizations move from the conceptual to the developmental phase. About 33% of firms are in the conceptual phase of implementing AI practices, down from 39% in July. About 39% of firms have entered the developmental phase of AI adoption, up from 26% in July.
The majority (63%) of respondents are turning to external sources for developing AI capability.
Some 44% of firms are also using AI for information technology purposes, while 36% use the technology for routine communication and content summarization across workflows.
However, 53% respondents cited that data integrity is one of the top barriers to wider AI adoption, while a lack of awareness and training (45%), and security vulnerabilities (35%), were cited as other top concerns to greater use.
With respect to market macroeconomics, almost one-half (46%) of respondents think the Federal Reserve's federal funds rate will remain between 3.75% and 4% by the end of 2025. “The rise in the 10-year Treasury yield since the Fed's rate cut in September 2024 signals a broader shift,” said Yelena Maleyev, senior economist at KPMG U.S., in the news release. “Asset managers should pay close attention to trends in long bond yields, which will be crucial to adapting strategies beyond short-term rate movements."
The survey was conducted in December and early January and involved responses from more than 100 asset management professionals in the U.S., representing private fund managers, traditional fund managers, publicly traded entities and institutional investors, investing across various asset classes including real estate, hedge funds, private debt and private equity. A majority of respondents represent organizations with $2.5 billion or more in assets under management.
