Business Maverick: ‘Zombie’ Future Threatens Asset Managers, Hunt Says

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Business Maverick: ‘Zombie’ Future Threatens Asset Managers, Hunt Says By Tim Cohen

“We have never seen such a disparity between winners and losers,” Hunt said in an interview with Bloomberg Television on Monday. “The vast majority of firms, if you’re just doing public equities, you’re just doing fixed income, you’re struggling. You’re in outflows, and we don’t see that changing anytime soon.”

No part of the investment industry is under as much pressure as active equities. There, easy access to cheap index funds has exposed the widespread and chronic underperformance of portfolio managers. Some asset managers have merged to gain scale. As Hunt sees it, size alone isn’t enough and he thinks only three business models will thrive: indexing giants such as BlackRock Inc. and Vanguard Group; boutique firms that specialize in a certain type of asset, such as private equity; andPGIM, the investment arm of insurer Prudential Financial Inc., oversees $1.3 trillion. It’s among the world’s largest managers of public fixed income, real estate debt and equity and private credit.

 

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