Allocators and Asset Managers Tell Us What Concerns Them Most

Institutional Investor recently concluded a survey of over 400 of its members and allocators, offering key insights on allocation trends, product innovation, and revealing what keeps some of the investment industry’s largest decision makers up at night.

The investment management sector is poised to confront a multitude of risks over the next decade, reflecting an increasingly connected yet changing global landscape. Cybercrime, identified by over 40% of respondents as the foremost threat for all respondents, poses significant challenges to financial institutions, necessitating cybersecurity overhaul measures to safeguard assets and maintain client trust.

For allocators, geopolitical instability is the next largest concern. Investors are particularly wary of global terrorism and war (36.9%), as well as the rise of populism (31%).

Asset management leaders are increasingly focused on technological advancements (36%), acknowledging both the opportunities and potential risks they present. Heads of distribution are notably concerned about market volatility (36%) and the potential for a global financial crisis (39%).

The survey also revealed marked differences between European and American investor concerns. Europeans are more concerned about cyber threats and terrorism, whereas American investors are more worried about domestic polarization, as well as a potential debt crisis or credit downgrade.

Further survey insights revealed what allocators and asset managers believe will be their biggest challenges in the years ahead. As market volatility and political regime changes contribute to instability, investors and managers alike will need to navigate the potential for a new financial crisis due to aggressive deregulation, Europe’s struggle with U.S. economic policies, and the impact of a rapidly changing global investment landscape.

Our survey was conducted between August and October of 2024. Since then, key elections have taken place in the United States, Uruguay, Moldova, and Romania to name a few. Geopolitical tensions persist in the Middle East, as well as Ukraine. News of an impending trade war in North America recently wiped out $3.4 trillion in stock market valuation gained since November, further adding to the ongoing volatility concerning investors in this survey.

See what allocators and asset managers are saying here.