PGIM CEO Sees ‘Zombie Firm’ Future for Most in Asset Management

The video discusses the current state of the asset management industry, highlighting the disparity between successful and struggling firms. It explores the impact of fee pressure, performance focus, and consolidation trends. The debate on industry consolidation is examined, noting that the asset management industry is driven by fiduciary duty rather than shareholder value. The concept of 'zombie firms' is introduced, describing firms that continue to exist despite outflows and reduced margins. Fee pressure is analyzed, revealing it is more targeted than a broad trend, affecting public equities more than private equity or real estate.

What factors are contributing to the disparity between winners and losers in the asset management industry?

• Increased focus on customer service

• Technological advancements

• Fee pressure and performance focus

• Expansion of global markets

Why has consolidation not occurred as expected in the asset management industry?

• Government regulations

• Lack of technological innovation

• The industry's nature as a profession with fiduciary duty

• High costs of mergers

What is a reason clients might resist consolidation in asset management firms?

• Desire for more investment options

• Preference for larger firms

• Fear of cultural issues affecting returns

• Interest in technological advancements

In which area of asset management is fee pressure most evident?

• Private credit

• Private equity

• Public equities

• Real estate

How has P. Jim managed fee pressure over the last five years?

• By increasing fees

• By growing higher yielding strategies

• By focusing on public equities

• By reducing staff