Man­aged as­sets in Ire­land to reach $7tn by 2025

The Irish Times - - Business + Your Money - LAURA SLAT­TERY

As­sets un­der man­age­ment in Ire­land will grow to ¤7 tril­lion by 2025, up from ¤4 tril­lion last year, ac­cord­ing to a new fore­cast by global ac­count­ing gi­ant PwC.

Ol­wyn Alexan­der, the firm’s global as­set and wealth man­age­ment leader and PwC Ire­land part­ner, said Ire­land would ben­e­fit from the wider growth in global as­sets un­der man­age­ment, which is ex­pected to al­most dou­ble in size by 2025 to $145.4 tril­lion (¤125 tril­lion).

This “ex­po­nen­tial” ex­pan­sion is be­ing driven by a growth in the mid­dle classes in the Asia-Pa­cific re­gion, a rise in pen­sions sav­ings as a greater onus is placed on in­di­vid­u­als to save for re­tire­ment and a “be­nign” in­ter­est rate en­vi­ron­ment that “looks set to con­tinue”, Ms Alexan­der said.

PwC is also “con­fi­dent” that Ire­land’s rate of eco­nomic growth, which is above the av­er­age Euro­pean Union ex­pan­sion in gross do­mes­tic prod­uct (GDP), will help it main­tain its place in the funds in­dus­try, in which it “punches well above its weight”.

Em­brac­ing tech­nol­ogy will be a key part of the process, ac­cord­ing to PwC. The

rise of ar­ti­fi­cial in­tel­li­gence and ro­bot­ics pro­vides op­por­tu­ni­ties to the in­dus­try to fur­ther man­age its cost base and de­liver bet­ter prod­ucts to con­sumers, Ms Alexan­der said.

Life ex­pectancy

“As­set man­age­ment has been ahead of the curve when it comes to AI,” she said, iden­ti­fy­ing “fur­ther po­ten­tial” for im­prove­ments.

“But we don’t fore­see a world where ev­ery­thing will be done by ma­chines,” she added. While AI will help de­liver bet­ter in­vest­ment anal­y­sis, “it will take hu­mans to make sense of this”.

Help­ing in­di­vid­u­als save for old age, as gov­ern­ments re­treat from de­fined-ben­e­fit pen­sion schemes, is “a new op­por­tu­nity” for prof­itable growth, PwC said.

Ex­pan­sion in de­fined con­tri­bu­tion pen­sion sav­ings as the world pop­u­la­tion builds wealth, and life ex­pectancy rises, is one of the main forces driv­ing the firm’s “op­ti­mistic” fore­casts for growth in as­sets un­der man­age­ment.

For in­di­vid­ual as­set man­age­ment com­pa­nies, it is a case of “do or die” when it comes to in­no­vat­ing for growth, PwC said.

“As­set and wealth man­agers must be pre­pared for suc­cess in some ar­eas and fail­ure in oth­ers,” said Ms Alexan­der. “Nur­tur­ing and re­tain­ing the right peo­ple will be ab­so­lutely vi­tal as the in­dus­try rein­vents it­self.”

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