A rapidly growing demand for green financial services risks sparking an all-out asset manager talent war across Europe, according to a new report.
Cerulli Associates warns that the asset management space is unable to keep up with a fast-growing appetite for net zero and other ESG-related advisory, management and consultancy services.
Asset owners' needs mostly evolve around the integration and implementation of sustainability standards and expertise into portfolio management and niche expertise within existing teams.
Regulatory changes and more critical investors are fuelling the increased demand, according to the report, which stated that more and more asset owners, as well as regulators, increasingly demand and expect more transparency and better knowledge, which leads to surge in demand for more detailed guidance from asset managers.
To illustrate the swelling demand, Cerulli estimated that European ESG assets under management have expanded from just over €4bn in 2018 to just under €7bn in at the end of 2021. The report said this growth is not expected to slow down anytime soon.
In a 2022 survey of European asset managers, Cerulli had 61% of respondents agreeing to the statement that there is a talent war.
"Several asset managers have commented that their products are less salable if they do not have the appropriate level of expertise, because investors now have a higher base level of expectation around ESG," said Justina Deveikyte, director of European institutional asset management research for Cerulli.
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