The evolution of the alternatives and private markets ecosystem in EMEA is being driven by a host of factors—ranging from new operating models and technology to governmental shifts and ongoing conflicts—and industry experts explored how those topics are reshaping markets for asset managers at our recent London Alts & Private Markets Forum. 

Senior executives from several of the world’s largest public and private funds, along with prominent thought leaders, shared their views on issues including the impact of geopolitics on global markets, increased outsourcing by fund managers, use cases for artificial intelligence, the importance of leadership and vision, and the significance of creating people-focused cultures.

Dan McNamara, our Chief Strategy Officer and Chief Financial Officer, and Paul Romer, Nobel Laureate and Professor at Boston College, opened the forum with an expansive fireside chat, “Charting the Course: Exploring Global Drivers Impacting the Future of Financial Markets.” Dan and Paul discussed the potential effect of new tariffs, fiscal and monetary policy, the financial stability of global markets, and inflation.

“The management of inflation is actually a real win for economics,” Paul said. “We’ve gotten inflation back down. So, I think the fears about hyperinflation can recede into the past.”

Continued geopolitical instability is likely to have a significant impact on global markets. Noting  “a big fork in international relationships,” Paul said China and Russia appear to be moving toward creating empires, while the EU continues to support the Westphalian concept of strict borders and national sovereignty that has many advantages. India “could be the most important player in the world” as it decides which path to follow, he said.

The European Union’s decision to create free trade areas and enable the free exchange of ideas promotes “gains from trade,” and based on its defense of Ukraine, the EU appears to be “strongly grounded in the notion of the Westphalian state,” Paul said.

The panel discussion, “Reengineering for Growth: Optimizing Operations through Outsourcing, Co-sourcing and Lift-Outs,” focused on increased outsourcing, centralized infrastructure, “right-shoring” and strategic alignments between fund managers and trusted partners. The panel was moderated by David Rochford, our Global Head of Public Markets, who was joined by panelists, Paul Devine, Head of Investment Operations at Mercer; Romil de Gogër, Chief Operating Officer at UBS O’Connor; and Venkat Kannan, Managing Director, Finance & Operations, Credit, Brookfield Asset Management.
 
Fund managers are working closely with trusted partners to improve back-, middle-, and front- office functions—including Know Your Customer/Anti-Money Laundering investor onboarding—transfer retention/hiring risk, as well as implementing new technology and data management platforms to improve reporting, the panelists said. One of the dominant themes was the significance of co-locating teams and trusted partners in the same area to develop strong working relationships and address issues quickly.

“We’ve always believed that we should co-locate where our investors are and where our investments are,” Venkat said. “We need to have our partners co-locate with us in those jurisdictions.”

A critical element in establishing global presence is determining the best locations to build teams and establish centers of excellence, Paul noted. “Right-shoring is a key word for us,” he said. To improve overall efficiency, Mercer places managers or senior leaders in nearby time zones to provide clean handoffs of overnight issues so colleagues can address them when they begin their workday. In addition, Paul said the firm focuses on ensuring that employees in all offices are integrated into Mercer’s global culture, regardless of location. “We see them as a significant part of the team, and we want them to feel valued,” he said.

While many firms throughout the industry continue to evaluate the best uses for artificial intelligence, Romil noted that UBS “is quite bullish on AI” and is applying AI to use cases and scenarios from across the bank. Analysts supporting the O’Connor’s portfolio managers are using AI to “track equity and bonds and creation of portfolios,” he said, adding that in the past six months “AI has helped us significantly in reducing analyst and PM time in investment decision-making.”

The opportunities and challenges of building supportive, purpose-driven cultures were the subject of the discussion, “The Cultural Evolution: Fostering a Culture of Well-Being & Growth,” hosted by Jo May, our Managing Director, Human Resources, with panelists including Murtaza Merchant, Managing Partner at MV Credit. Companies that invest in purpose-driven cultures are more successful and are stronger performers, but the panelists made clear that there is no single formula for building those cultures. The challenges include addressing unique regional needs, balancing the needs of multi-generations in the workplace, managing hybrid work, and trying to ensure physical and mental wellness.

Firms must make a long-term commitment to developing diverse, inclusive cultures, and that commitment must extend from senior to junior employees. “At MV Credit, more than 53% of the team are women and 50% are in senior positions,”  Murtaza said, adding that the firm’s efforts date back more than 15 years. “It just doesn’t happen overnight.”

Strong cultures cultivate a wide range of viewpoints and ensure that employees feel safe expressing opinions without fear of ridicule, Jo said. Addressing unconscious bias and expanding hiring pools beyond typical sources or top-tier universities, are critical elements in promoting diversity, the panelists agreed.

Baroness Karren Brady of Knightsbridge CBE, a celebrated leader in UK sports, business, and government, described her experiences in succeeding in fields traditionally dominated by men. She shared thoughts about strong leadership, serving as a champion for women in business, reinforcing physical and mental wellbeing, and maintaining core values, in the fireside chat, “Breaking Barriers in Business & Beyond,” with Ben Griffiths, our Global Head of Fund Finance.

“The most important thing about running a ‘people’ business is really good leadership, and leadership should never be confused with management,” she said. “Management is setting out a series of goals and managing people to deliver them…Leadership is about vision. And sometimes, as a leader, it’s a vision only you can see. The job of good leadership is to persuade people to help you deliver your vision, and to believe in your vision.”