As asset management platforms expand, product architecture is being rationalised. Firms inheriting large volumes of overlapping investment products are reducing the number of active funds and consolidating assets into higher-conviction offerings. In developed markets, many firms are replacing underperforming active funds with ETFs to reduce costs and increase transparency. Active management is being retained in emerging markets, where the opportunity to generate alpha is more pronounced.
By narrowing product shelves, firms are strengthening due diligence processes and improving pricing power with external managers. Regulatory frameworks such as MiFID II are being used to reinforce transparency and demonstrate cost-efficiency, rather than being treated as compliance burdens.
As one executive remarked: "The path of travel is probably to reduce the number of partners because there is an incentive to scale up the platform and to scale the mandates."
This underscores a broader shift towards consolidation, not only of funds, but of manager relationships, as firms look to balance performance, governance and value delivery at scale.
In private assets, firms are shifting from third-party distribution to proprietary structures. Internal fund vehicles, including bespoke fund-of-funds, are being increasingly used to manage client allocations. These structures allow for better portfolio diversification, control over manager selection, and direct ownership of the client relationship.
Strategic investment in technology, operating models, and product governance will continue to be essential as platforms evolve in scale and scope.
