Asset managers and investment solutions providers have had a tough time over the past couple of years, but the situation is likely to change now. Will Truscott, CEO of Columbia Threadneedle Investments believes that there as exciting opportunities for managers as investment industry trends update.

Firstly, Truscott believes positive interest rates are back now and bonds and cash could be viable alternatives to stocks. “We have been living with zero percent rates – and what is essentially free money – for too long. There are investors today who have never lived in an environment with a real cost for borrowing money,” writes Truscott, adding that now is a good time because business downturns clear out weak and inefficient companies.

The investment management firm says that such an environment gives active managers the ability to choose companies better while avoiding areas that are prone to risk-taking — as rising interest rates will have a greater impact on them.

Secondly, the asset management business model is based on scale, but the time for cost-effective customisation might prove beneficial as investor demands rise. “Custom is the opposite of scale, so that’s a big change in how we, and our peers, are going to need to think and operate,” as per Truscott.

A suggestion by the Columbia Threadneedle CEO is to dramatically increase operational efficiency and that asset managers must get their act together to better serve their clients.

Thirdly, Truscott believes China’s influence is on shaky grounds. While the rise of China has been a major theme, the consolidation of power under one person will impact businesses, proving a major obstacle for China to become a real competitor in the world economy.

Lastly, under investment industry trends, the talent pool is relevant despite the use of AI and automated solutions. “The barriers to entry in asset management are fairly low, so there is always going to be room for specialty firms that do one or two things really, really well. But among the large firms that offer multiple products and services, I think there is going to be further consolidation,” writes Truscott.

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