Asset managers must broaden their skills as a wave of new investor demands has exposed a gap between their needs and asset managers’ ability to keep pace, concludes a global survey of 300 senior executives at asset management firms conducted by State Street.

The report refers to skills shortages in areas such as portfolio construction, the ability to assess and monitor risks across portfolios and knowledge of increasingly complex compliance and regulatory requirements.

One of the developments that has created this situation is increasing investor demand for multi-asset solutions encompassing asset classes from real estate and commodities to hedge funds and infrastructure. Two-thirds (67%) of asset managers surveyed identified this type of investment as most likely to drive growth over the next three years, yet 74% of respondents agreed that few asset managers have the capabilities required to thrive in a multi-asset investment world.

The second key development relates to growing geographical diversity. Asset managers are increasingly turning to new markets for growth and this expansion forces them to demonstrate a broader range of skills. They must be able to navigate the regulatory demands of different jurisdictions, identify the right product and distribution channels for each new market and deliver the required levels of transparency to both regulators and investors.

“To address these skills shortages, asset managers plan to augment their expertise through recruitment, while also developing their existing employees’ capabilities,” said Joerg Ambrosius, head of asset manager solutions for Europe, Middle East and Africa, State Street. “Over the next three years, more than half the asset managers in our survey (54%) plan to bring in new talent, while two-thirds expect to invest in training for their current teams.”