Amid solid demand for optimal utilization and management of assets, the rising interest in ESG investing, the growing private markets, and the increasing adoption of digital technology, the asset management industry’s outlook appears promising.
Given the industry’s bright prospects, fundamentally strong asset management stocks Sprott Inc. (SII – Get Rating), Diamond Hill Investment Group, Inc. (DHIL – Get Rating), and Silvercrest Asset Management Group Inc. (SAMG – Get Rating) could be ideal buys now.
Despite macroeconomic headwinds like high inflation, rising interest rates, and market volatility, the asset management industry is expected to remain resilient and witness robust growth in the long term, driven by soaring demand for optimal asset utilization, the rising need for efficient tracking and management of assets, and increasing popularity of ESG and alternative investments.
Companies should pursue high-growth alternative investments and private market opportunities. Alternatives represented nearly $20 trillion of global AUM as of year-end 2022, accounting for half of the industry’s global revenues. Alternative assets generated more than $190 billion in revenues, and the solid momentum is expected to prevail with a CAGR of 7% over the next five years.
As per a report by Precedence Research, the global asset management market is projected to reach $7.60 trillion by 2032, growing at a 35.2% CAGR during the forecast period (2023-2032).
Moreover, growing digitalization presents numerous growth opportunities for the asset management industry. Several industry players are increasingly investing in technological advancements, including artificial intelligence (AI), big data, blockchain, augmented reality (AR), and the Internet of Things (IoT), to enhance investment performance.
The implementation of digital technology allows asset managers to streamline operations, optimize the utilization of existing resources, enhance the precision and efficiency of asset tracking and management systems, lower costs, and strengthen customer-centric relationships, propelling the industry’s growth and profitability.
For instance, real-time tracking and monitoring of assets can be…
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