Citigroup.com Homepage

Rebooting the Global Asset Management Industry

Article  •  June 23, 2025

The global asset management industry is in the midst of a reset. The profit dynamic is worsening with the rise of passive funds. Defined Benefit pension plans are now derisking with ageing demographics. The investor base is shifting towards a new generation of digitally savvy investors with radically different needs from their predecessors. Technology is advancing in leaps and bounds.

In a new report, Rebooting the Global Asset Management Industry, Citi and CREATE-Research have released findings offering a comprehensive view of the structural shifts reshaping the global asset management industry. 

The report draws insights from 269 asset managers across public and private markets from 26 countries, managing a total of US$37.7 trillion in Assets under Management and features 30 interviews with senior executives from a cross-section of the survey respondents.

Key findings

  • Ongoing industry challenges are coinciding with new opportunities: More than half of respondents cited new inflows going to mega players, the rise of passive funds, accelerating fee compression, and rising costs as key challenges.

    At the same time, new inter-linked growth drivers are emerging. 67% of respondents believe democratization of private markets will drive organic growth in their businesses over the next three years; 61% cited the advancement of AI and GenAI, and 59% said intergenerational wealth transfer from Baby Boomers will contribute to growth.

  • Small step, not big leaps, mark the rise of AI and Gen AI: While AI and GenAI are expected to reshape operating models, the adoption rate is moderate, with 41% at the implementation phase of AI and 26% for GenAI. That said, a majority of respondents believe AI and Gen AI will significantly impact investment processes, although legacy systems and concerns around data quality, security and transparency remain key barriers.
     
  • Winning business models will combine the best of old and new:  Successful business models will blend traditional and new approaches with an emphasis on client-centricity, such as tech-assisted personalized portfolios, performance-based fees and outcome-oriented investing.

    Our findings on platforms, in particular, signal a marked departure from how things are done currently. 67% of respondents selected democratized access to private markets as a key feature of a winning business model, and 56% cited diverse investment strategies at point of sale. Close to half or 49% called out Direct-to-Consumer access and channels.

  • Outsourcing is linked with organic growth at lower costs: What started as a cost-cutting tactic is morphing into a strategic imperative with outsourcing creating tangible benefits on both the bottom line and organic growth. 59% of respondents noted the reduction of unit costs from outsourcing, and 57% acknowledged that it allows top executives to focus on core competencies.
     
  • Investors’ goals will not change but their means will: To deliver competitive differentiation and remain relevant in the changing landscape, asset managers, particularly small and medium-sized ones will evolve their delivery. 66% are focused on becoming clients’ trusted advisors, and 61% are investing in talent and expertise. On distribution, partnering with asset gatherers was a top priority. 

View the full "Rebooting the Global Asset Management Industry" report

Securities Services

Securities Services

Enabling Issuers and Investors across the entire investment lifecycle.
Get in Touch

Sign up to receive the latest insights from Citi.