A welcome deluge

We might disagree on what the top three themes in asset management were during 2020, but we’d probably agree that they each stemmed from the pandemic.

The search for income took a new turn, given the greater prospect of negative interest rates, and ESG started to hinge more on the ‘social’ aspect, due partly to perceptions around how companies behaved towards their staff, customers and society at large during the pandemic.

Investments in private-market assets came into sharper focus. Not only did issues of liquidity and valuation rear up again, but demand for private investments from institutional investors did not seem to abate. Indeed, if profound changes are afoot in society and in business, exposure to some of these changes at an early stage is desirable, rather than waiting for a theme to be packaged as an ETF. ‘Medicare’ is one example.

And though it is still to be seen quite how the pandemic will shape 2021 one thing is certain: 2021 will see a heavy regulatory agenda.

At the European level (but surely with consequences for a ‘Brexited’ UK) the AIFMD and Ucits regulations will be studied, perhaps harmonized. There are other measures in the pipeline that may affect either of the regulations.

There is also talk of MiFID III. Priips is back on the agenda. Meanwhile, anti-money laundering is a topic that never stands still.

The industry stopped talking about the “deluge” of regulation some years ago when the post-crisis raft of laws (such as the AIFMD) started to bed down. This year may see another deluge – but right now, an outbreak of regulation would be a welcome relief it trumped the virus to become the asset management industry’s key concern.