Siobhan Moran, Head of Client Coverage, Ireland and Barry Hurley, Associate Director, Client Coverage at RBC Investor & Treasury Services: There were a number of transformative developments in the asset management and investment funds industry in 2022. They were as follows:
In 2022, we witnessed the macroeconomic environment impacted by high inflation and the associated actions taken by central banks to increase interest rates to slow that inflationary impact across global economies. This impacted global stock markets where asset managers and investors contended with volatility and turbulence; making 2022 a difficult year for all asset management participants. From an RBC Investor & Treasury Services perspective, the “retailisation” of private capital funds was one of the more prevalent trends with asset managers looking for new ways to expand their European investor market share as they attempt to repackage alternative investment products into fund structures suitable for retail audiences. In addition, more conversations have certainly been generated around the use of the ELTIF, whose regulations are currently under review and it will be interesting to track developments as we move into 2023.

ESG investing remained at the fore with much of the focus shifting to investors’ growing need to have greater transparency around ESG; managers must respond by sharing more information and there are challenges to link ESG with more data driven reporting. Increased adoption of regulatory and industry-wide standards and guidelines will also remain a key topic in 2023 for ESG. The market is seeing a growing trend towards passive investing with more investors opting for low-cost index-tracking funds i.e. ETFs as opposed to actively-managed funds.

What remained constant in 2022 as in most years is regulation. Whether that be the Settlement Discipline Regime of Central Securities Depositories Regulation (CSDR), Sustainable Finance Disclosure Regulation (SFDR), EU cross border distribution of funds directive or packaged retail investment and insurance-based products (PRIIPS), the regulatory review and readiness calendar remains occupied.

Meliosa O’Caoimh, Country Head, Ireland, Northern Trust: Northern Trust has always believed, and we have allocated our resources accordingly, that ongoing and consistent innovation is an essential part of being a leader in our industry. We cannot succeed without it, and our clients will not trust us to safeguard their assets, and to support their growth, if we cannot demonstrate a constant culture of innovation. And we have always realised that a culture of innovation means that our ideas will not always pay off.
Our Innovation Laboratory in Limerick is an example of where we have smart and capable people working with clients to develop innovative solutions.
That culture that we live and breathe, which helps us outperform in positive market conditions, is our key protection in choppier waters. 2022’s fluid market conditions and accompanying inflationary and recessionary pressures have contributed to the present challenging environment for our industry. When the market value of assets does not continue to appreciate, it is no longer enough to simply increase assets – new outlets need to be found – technologically and operationally – to help create value and efficiencies.

Technology can help reduce costs and automation can help streamline processes – and there is more emphasis than ever on using it to optimise workflows and enable innovation. This continues to be a significant part of our conversations with asset managers around opportunities to optimise their operating models and the evolving support they require. Firms that want to reap the benefits of technology and data innovation should consider working with providers who have invested in advanced tools that can make a positive difference across these areas – for example technologies such as data science, advanced analytics, artificial intelligence and machine learning.