Business Strategy and Outlook
| Greggory Warren |Several issues have made it increasingly difficult for asset managers that are running predominantly active portfolios to generate positive organic AUM growth. Poor relative active investment performance, the growth and acceptance of low-cost index-based products, and the expanding power of the retail-advised channel are leaving them more dependent on market gains to increase their managed assets. We believe there will always be room for active management, but the advantage of getting and retaining placement on platforms will go to asset managers with greater scale, established brands, solid long-term performance, and reasonable fees.