NEW YORK, July 26, 2016 /PRNewswire/ -- The investment industry in Asia has been growing, and today hosts some of the most exciting prospects in the global market. Rapid growth, the emergence of a large and affluent middle class and impressively high saving rates combine to create huge opportunities for fund managers with their eyes set on growth.
While Asia's middle-class population is expanding rapidly, so too is their will to invest. Meanwhile an ageing Asian population looks to preserve its wealth for the future, whether for education, healthcare, retirement, or insurance. Asia's investment management industry has embraced the abundance of new opportunities, growing its assets under management at an extraordinary pace. In the past, financial assets were concentrated largely on a single market or with a significant home-bias portfolio. But as markets continue to mature, investors are beginning to favour well-diversified portfolios across asset classes and geography.
Firms from all over the world are looking to benefit from the rapid growth in assets in Asia Pacific. Eagle Gates Group, predicts assets of $1.6 trillion by 2017, up from $1.1 trillion in 2007. Firms in the region are aware of what is at stake and most are already pursuing plans for expansion.
The rate of growth is hugely enticing to asset managers — but there is no doubt that the region presents huge challenges too. Asia Pacific is vast and disparate, with different languages, currencies, cultures and politics, as well as a multitude of legal, tax and regulatory systems with which to come to grips.
The current period is also a uniquely testing time for investors. There are signs of recovery and growth in key markets, but substantial questions still loom over the world economy, including the ability of the United States to tame its debt long term and the ongoing travails of the eurozone. Although Asia has escaped the worst of the recent storm, it too faces its own challenges, including the ability of China to tighten credit while sustaining growth.
Asian asset managers know that they will need to be at the top of their game to succeed in this testing environment. For investment management companies, the problem of finding good returns has a serious knock-on effect.
Martin Harris, chief market analyst of Eagle Gates Group, notes that many investors are questioning the charges asset managers make. "Active fees are too high if you're only an average active performer," he explains.
The issue affects much of the industry and an obvious response is to reduce expenses. However, cost cutting is not the main focus of most industry companies in Asia. Instead, some type of expansion such as penetrating new growth markets or deepening the penetration of existing markets are deemed as the leading priority. Some are also trying to build a brand across the Asia Pacific region, when previously they would have headed to Europe.
Companies going into new markets are being driven by both opportunity and economic necessity. Staying put is often not an option. In some markets, it is no longer possible to raise sufficient funds locally to satisfy and feed the required infrastructure. Declining investor interest in a market like Japan also means that companies there are considering overseas opportunities.
Most estimates already put Asia's share of world GDP at just below 30 percent and its emerging markets are projected to grow far faster than those in the developed world.
"Asia holds enticing possibilities for growth. Although we will face competition from local asset management firms which benefit from large local distribution networks, we believe by combining local market insight and capabilities with the strength and scale of our global technology and solutions, we can navigate any challenges in the region and serve our clients well," Martin Harris notes.
About Eagle Gates Group
Eagle Gates Group is ranked among one of the world's leading asset management firm. First established in 2005 as Eagle Gates Corp in the United States of America, the firm was later renamed Eagle Gates Group in 2009 to reiterate its desire to expand internationally and become a global financial powerhouse. Uniting over 300 specialized investment professionals globally, Eagle Gates also boasts a comprehensive administrative support, state-of-the-art IT systems and excellent risk control protocols. From insight to action, Eagle Gates helps its clients better serve their own with more durable portfolios.