Category : Multi-Asset / New Asset Allocation Framework

Confronting Passification: Three Ways Forward For Active Managers

“Passification” is the process through which investment categories once dominated by active managers are being captured by index-linked strategies. To avoid being passified, active management business strategies can take three dimensions.

1. Focus on passive-resistant categories
2. Employ high “degree of investment freedom” strategies
3. Redefine the current passive-biased framework

Want Scalability? Think Multi-Asset.

The middle is a tough place to be for investment managers these days. Once the lifeblood of large shops, narrow ‘core’ products have lost the interest of investors. The titan funds built in the 1990s and 2000s are in net redemption – well below their peak AuM levels. These funds are now part of a legacy book of business associated with a former era. Now the question for these funds is less about growth and more about retention.

End to the Reign of Style Boxes?

From a rigid framework driven by investor demands for strict style adherence, asset managers are enjoying expanding freedoms in managing investment strategies. After a twenty-five year period of intermediaries constricting active managers’ discretion and forcing narrower and narrower parameters in the name of style purity, the grip of style-box logic is slowly loosening.