Peter Harrison, CEO of Schroders, delves into the shifting tides of investment management. He examines the challenges facing the UK market, including regulatory hurdles and the impact of Brexit. The conversation shifts to the integration of AI in asset management, emphasizing its potential for enhancing portfolio strategies. Harrison also discusses the importance of building resilient teams, fostering innovation, and learning from failures in the face of evolving global dynamics. His insights are invaluable for professionals navigating the modern financial landscape.
The importance of committed ownership fosters long-term vision, enabling companies like Schroders to adapt and thrive in a changing investment landscape.
The integration of AI in investment practices is set to revolutionize wealth management, enhancing decision-making through advanced tools and personalized insights.
Deep dives
The Key to Longevity in Business
The importance of committed ownership is highlighted as a crucial factor in the longevity of successful companies, such as Schroders, which has been in operation for 200 years. A long-term vision, supported by family backing, allows for effective adaptation and evolution within the finance sector. This structure enables the business to navigate significant changes, including the massive growth of passive management and shifts towards private investment. The ability to embrace change is essential for sustaining a business over time, particularly in the rapidly evolving investment management landscape.
Challenges in the UK Capital Market
The decline of the UK capital market over the past 15 years is attributed to regulatory changes that shifted domestic savings away from riskier equity investments towards safer government bonds. This shift has led to a significant reduction in the equity market and a decline in domestic capital. Challenges brought on by Brexit further undermined confidence in the UK as a place for long-term investment decisions, though the environment is gradually improving. Despite the growth of private markets in London, the issue remains that the returns are increasingly driven by foreign capital rather than benefiting UK savers.
The Role of Innovation and AI in Finance
Innovation and the integration of artificial intelligence in investment practices are expected to radically change how investment firms operate. AI has the potential to enhance wealth management by providing personalized advice and insights more effectively than traditional methods. The future of investment management could see portfolio managers equipped with advanced tools and data to inform their decisions, improving overall investment outcomes. Emphasizing a culture of innovation and the ability to adapt will be vital for firms looking to thrive in an increasingly competitive and tech-driven environment.
This is a special 10-minute version of the podcast for those in a hurry.Here you can listen to the full episode: (APPLE LINK)In this episode, Nicolai sits down with Peter Harrison, CEO of Schroders, one of Europe’s largest asset managers with nearly 200 years of history. Peter shares insights on navigating a rapidly evolving investment landscape, from the shift toward private markets to the impact of AI and technology on asset management. He also dives into the challenges of the UK market, reflecting on how changing regulations and global competition have reshaped the industry. Tune in for Peter’s thoughts on building resilient teams, risk taking and his advice for young professionals.
In Good Company is hosted by Nicolai Tangen, CEO of Norges Bank Investment Management. New full episodes every Wednesday, and don't miss our Highlight episodes every Friday.
The production team for this episode includes PLAN-B's Pål Huuse and Niklas Figenschau Johansen. Background research was conducted by Sara Arnesen.