Asset Managers Bullish on Digital Assets, ESG: Survey
Posted by Colin Lambert. Last updated: June 26, 2023
A new survey conducted by Six Group finds that the buy-side community is bullish on what could be viewed as two contrasting areas given the environmental reputation of the former, digital assets and ESG.
The exchange group surveyed 300 portfolio managers, asset allocators, and hedge fund managers, across Europe, Asia, and the US and says, predictably, there were strong indications from the respondents that there is a significant role to play for market infrastructure providers, data vendors, and technology providers if firms are to reach the levels of growth in each area.
The demand for extensive institutional experience was particularly felt in the digital assets arena, Six Group says, where confidence in the way digital assets are traded is being consistently cited as a gateway to greater adoption. Over 60% of respondents pointed to a safer trading environment as the key driver.
The challenges felt by respondents in the ESG space were more varied, with several different but equally complex issues cited as the biggest blocker to implementing an effective ESG investment strategy. These included complex reporting requirements (20.5%), accurately analysing the ESG credentials of an asset (19.5%), and availability and quality of ESG-related data (19.2%).
Overall, respondents agreed there are strong drivers for expansion in both areas, which have seen booms in interest over the last few years. While 84% foresee their ESG holdings growing over the next five years, 69% plan to hold digital tokens in their portfolios in the next 12 months.
“The investment management space is unique in its power to enact sharp and significant change through the collective allocation of capital,” observes Jos Dijsselhof, CEO of Six Group. “It is in a perpetual state of evolution, constantly adapting to new investing methodologies, emerging investment trends, and technological innovation. Digital assets have significantly permeated the agendas of financial institutions, while the conversation surrounding ESG investing roars louder than ever.
“The findings of this research indicate investment managers recognise the significant growth potential presented by both areas, and – critically – possess strong expectations for heightened industry uptake over the coming months,” he adds. “Yet, at this critical juncture in their development and adoption, the buy-side must be able to rely fully on the expertise of trusted partners. Without this, realising their growing ambitions and remaining competitive in the rapidly evolving global investment landscape seems a near insurmountable challenge.”