Fund Forum: Technology giants could enter fund management
Technology behemoths such as Apple, Google or Amazon could enter the fund management space over the next few years, according to panellists, speaking at Fund Forum in Monte Carlo.
This comes following a report – Investing in the Future – published by KPMG which speculated that these technology giants, buoyed by their appeal among younger people, could emerge as power houses in the investment management industry.
“The emergence in fund management – be it as adviser or provider - of technology providers such as Google and Amazon would be a good thing for the industry. These organisations would have an enormous reach and they would certainly be at the top of investors’ search engines,” said Andy Brown, head of manager research at Prudential.
Brands such as these will have a diverse client demographic and will appeal to younger, prospective investors. Furthermore, unlike fund managers, these technology companies have not had their reputation soured by the financial crisis.,
“Fund managers would be well-served to get on the back of these technology firms if they decide to embrace fund management,” highlighted Brown.
The KPMG study highlighted, however, that there were challenges to these technology giants entering fund management, and suggested some may elect to forge strategic partnerships with established providers.
That same KPMG study also warned asset managers that they should evolve their businesses or risk failure. The study estimated nearly half of all asset managers would not exist by 2030 and advised them to target younger prospective clients and be more forward thinking about building up their technology infrastructure.