Irish managed assets could top €7tn

Assets under management in Ireland have the potential to grow from €4 trillion last year to €7tn by 2025, a new report has claimed, writes Pádraig Hoara

The PwC report said global assets under management overall will almost double in size by 2025, from almost $85tn (€73tn) in 2016 to more than $111tn (€95.5tn) by 2020.

That figure could grow to more than $145tn by 2025, PwC said in its global assets and wealth management report, which is compiled every three years.

While the report predicts rapid growth for the asset and wealth management industry, it also warned that “firms needs to take action now, if they’re to survive an exponential level of change”.

Global head of asset and wealth management Olwyn Alexander said: “Asset managers can take advantage of this massive global growth opportunity if they’re innovative. But it’s do or die, and they must take action now.

This industry will look very different in five to 10 years’ time and we expect to see fewer firms managing far more assets significantly more cheaply.”

Ms Alexander, who is also Irish partner at PwC, said with an economy that continues to grow at above EU average GDP levels, the firm was very confident about future growth capacity for Ireland’s funds industry.

“Shifts in global investment patterns to passive and alternatives, where Ireland punches well above its weight, will further fuel growth in Ireland,” she said.

She added that with the uncertainties caused by Brexit and other geopolitical challenges, Ireland could not afford to be complacent.

“Technology and particularly the rise of artificial intelligence (AI) and robotics provides great opportunities to further manage the cost base and deliver even better products to consumers,” she said.

The report cautioned that the growth projection for Ireland was based on assumptions of continued global growth and a benign interest rate environment.

Other key findings of the report were that alternative asset classes — in particular, real assets, private equity and private debt, PwC said — will more than double in size, reaching more than $21tn by 2025, accounting for 15% of global assets under management.