Less than a third of asset managers are expecting to increase assets under management by more than 8 per cent over the next two years, according to new research by State Street Corporation and the Economist Intelligence Unit.

The survey of more than 160 European asset managers found 28 per cent of respondents considered yields to be the most important factor driving investment decisions, while risk aversion, diversification away from mainstream asset classes, and regulatory complexity/uncertainty were picked by 27, 22 and 22 per cent of managers respectively.

Internal policies and procedures were highlighted as the greatest challenge to bringing new products to the market by 27 per cent of respondents, while finding consensus among senior managers was cited by 19 per cent.

State Street vice chair and head of its global services and global markets business for Europe, Middle East, Africa and Asia Pacific Joe Antonellis said managers were seeking strategies to navigate the new environment, and the search for fresh ideas was driving a “significant shift” in approach.

“They are forging new relationships with investors and service providers and the benefits will go to those firms that can deliver innovative outcome-based solutions or genuine alpha. Those managers that cannot will struggle.”

The survey also found 49 per cent of managers considered providing a high level of detailed and quality information to clients to be the greatest data management challenge facing them. Other factors included achieving sufficient scale with in-house systems, cited by 44 per cent of asset managers, and providing accurate data to regulators and auditors in a timely fashion, cited by 33 per cent of respondents.

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