Financial Institutions

Asset Management in Germany – The Problem Goes Deeper Than the Crisis

Johannes Burkhardt Frank Fernholz Anselm Heil Christian Klingkowski Ludger Kübel-Sorger Thomas Schulte Gian Vahedi

The COVID-19 crisis will hurt Asset Managers, but even in our worst case assumptions, it does not seem to pose an existential threat to most Fund Managers. But maybe, the real threat to the industry is not the crisis – Rather, the past 10 years of strong market growth have overcompensated most pressure points, and this lack of a “burning platform” has led to significant underinvestment in innovation and competitiveness. The current crisis may even amplify this state of underinvestment as most firms are cutting investments rapidly. Paradoxically, however, a time of crisis is actually the most important time to invest in competitiveness. We expect that only those asset managers that think strategically about critical investments for their future competitiveness and that do so even in the midst of the crisis will hold a ticket to compete in this market in the future.