Enable: If you think about the entire value chain of an Asset Manager, today everything from distribution to portfolio optimisation is mostly in-house. Given the resource constraints each individual firm has, the quality of each stage of that value chain that an individual Asset Manager can pragmatically effect is challenged. Technology companies do one thing and one thing only within that value chain. If Asset Managers are open enough to clearly identify what they are good at and are willing to work with technology companies to source the parts of the value chain where their track record of capital efficiency, cost or performance is weak, it could greatly enable their stakeholder outcomes.
Transform:Some technology companies faced with the frustration of selling into a rather unsophisticated B2B buying process in the Asset Management industry are raising sufficient capital to compete directly across the whole value chain. They are going B2C and we will see a horde of new fully digital Schroders, T Rowe Prices from asset aggregation from retail clients all the way to capital deployment through global mandates. This will dramatically change the intermediation cost models that we see in the current incumbents from asset aggregation to deployment and make it really difficult for incumbents to compete.
Essentially, Asset Managers that learn to work with lean and cost-effective high performant technology companies will thrive given the strength of their franchise, client servicing models and track record while technology companies that manage to successfully challenge the incumbents across the whole value chain will usher in a whole new operating model.”
Samir Rath, Chief Executive Officer, BlueFire AI
