What’s the future of asset management? More challenges as well as opportunities, Milken panelists agreed.
There’s a lot to digest at the moment when it comes to the industry's future, panelists said during a discussion on May 5 at the Milken Institute 2025 Global Conference, held in Beverly Hills, Calif.
“You've got shifting monetary policy, the integration of AI, geopolitical tensions and, at the same time, clients are increasingly wanting personalization of their portfolios and agility in their portfolio construction," said moderator Richard Ditizio, CEO of the Milken Institute.
Those aren’t the only considerations: Today’s asset managers are facing the challenge of educating financial advisers as well as individual wealth investors on the merits of adding private markets, attracting and retaining talent, meeting the needs of a population that’s living longer and maintaining an edge as a firm grows its AUM, panelists said.
Clients, noted Jean Hynes, CEO of Wellington Management, are looking for more diversification in active equities for the first time in a number of years.
“We’re doing a lot of scenario analysis about what could happen with policy, whether it is tariffs or trade or deregulation, how the U.S. reacts, how Japan reacts," she said. “And then trying to spend a lot of time thinking about what portfolios look like.”
“There’s not fear — I think it’s more that there’s an energy. For us as an active manager, this period of volatility and more dispersion has provided opportunities," she added.
Artificial intelligence will reshape both the industry and the composition of investment teams, said Matthew Harris, founding partner, Global Infrastructure Partners at BlackRock.
In the next month, GIP will begin experimenting with an AI agent on its investment committee. It used to take “countless hours" for a team to research a potential transaction, assess the competition, set up the valuation and weigh the exit opportunity, he said.
But “think about if … somebody in the investment committee says, well I see that analysis you did there and could you do it differently for me? Enter that in and in five seconds it spits out an answer for you."
“There is no question it’s going to change how we think about the composition of the teams that go into what we’ve done for the last 25 years," he said. “That’s going to be a fundamental change."
For employees working in more commoditized roles, employers need to invest to help them develop skills for other roles, said Mike Gitlin, president and CEO of Capital Group.
At a recent internal meeting, Gitlin recounted that he was asked if he could say that an individual's job wouldn't be eliminated by AI.
"My answer was absolutely not," Gitlin said. "I'm going to tell you that AI is going to change most jobs and create plenty of jobs, but you need to invest in your own career and we need to invest in your career because a lot of things will change in the next decade."
Another key shift is in the convergence of thinking around public and private assets, panelists noted.
Clients are beginning to think about their total credit exposure and not bucket the investments as public or private. It’s the same with growth exposure, Wellington’s Hynes said.
“I think we're going to look back in 10 years and there's going to be a shift in how people think about their exposures partly because they are similar," she said. “It's just the liquidity is different.”
