The Investment Management Industry constitutes a very important element of the global economy, essentially serving as intermediary in the process of channeling resources from surplus entities to deficit ones, having an incentive-compatible mechanism to allocate assets most efficiently. Along the past decades, profound transformations have been observed across the sector, of which at least two of them are eminent: (1) Change in investment paradigm, i.e. a movement from the well-established active-only manage- ment, towards an increasing allocation to passive funds, with a special influence of the disruption ignited by “factor investing/smart beta”; and (2) Technology advance- ments, enabling to offer cheaper, versatile and more sophisticated products/services such as smart beta quantitative funds, high-frequency trading, hybrid active manage- ment, and robo-advisors. We proposed an analytical framework to evaluate the industry from the perspective of both portfolio management and efficient market theories, seeking to explain the ratio- nale of the foregoing transformations, and their implications to the sectors landscape. Furthermore, state-of-art academic papers, consulting firms reports, as well as public information extracted from asset management companies were employed to back-up our analysis and conclusions. We finally concluded that the industry is, in fact, moving towards the direction of an equilibrium point between passive and active, because, despite the rise of passive management, we still observe a significant competitive advantages in alpha-generation by some active hedge funds, what suggests their sustainability over the long-run. Moreover, we observe an increase in the [already high] industry concentration levels, which might have strong implications to antitrust regulations in the foreseeable future.
Il settore della gestione degli investimenti costituisce un elemento molto importante dell'economia globale, essenzialmente fungendo da intermediari nel processo di incanalamento delle risorse dalle entità in eccedenza a quelle in deficit, avendo un meccanismo compatibile con gli incentivi per allocare le attività nel modo più efficiente. Nel corso degli ultimi decenni, sono state osservate profonde trasformazioni in tutto il settore, di cui almeno due sono eminenti: (1) cambiamento nel paradigma di investimento, vale a dire un passaggio dalla consolidata gestione del solo attivo verso una crescente allocazione a fondi passivi, con una particolare influenza di perturbazione ignorata da "fattore di investimento / smart beta"; e (2) i progressi tecnologici, che consentono di offrire prodotti / servizi più economici, versatili e più sofisticati come fondi quantitativi smart beta, trading ad alta frequenza, gestione ibrida attiva e robo-advisor. Abbiamo proposto un quadro analitico per valutare il settore dal punto di vista sia della gestione del portafoglio sia delle teorie di mercato efficienti, cercando di spiegare il rapporto tra le trasformazioni precedenti e le loro implicazioni sul panorama dei settori. Inoltre, sono stati impiegati documenti accademici all'avanguardia, rapporti di società di consulenza, nonché informazioni pubbliche estratte da società di gestione patrimoniale per supportare le nostre analisi e conclusioni. Abbiamo infine concluso che l'industria si sta effettivamente muovendo verso la direzione di un punto di equilibrio tra passivo e attivo, perché, nonostante l'ascesa della gestione passiva, notiamo ancora i significativi vantaggi competitivi nella generazione alfa da parte di alcuni hedge fund attivi, cosa suggerisce la loro sostenibilità a lungo termine. Inoltre, osserviamo un aumento dei [già alti] livelli di concentrazione del settore, che potrebbe avere forti implicazioni per le normative antitrust nel prossimo futuro.
The rise of passive management
PERUCCI BOLOGNESI, PEDRO
2018/2019
Abstract
The Investment Management Industry constitutes a very important element of the global economy, essentially serving as intermediary in the process of channeling resources from surplus entities to deficit ones, having an incentive-compatible mechanism to allocate assets most efficiently. Along the past decades, profound transformations have been observed across the sector, of which at least two of them are eminent: (1) Change in investment paradigm, i.e. a movement from the well-established active-only manage- ment, towards an increasing allocation to passive funds, with a special influence of the disruption ignited by “factor investing/smart beta”; and (2) Technology advance- ments, enabling to offer cheaper, versatile and more sophisticated products/services such as smart beta quantitative funds, high-frequency trading, hybrid active manage- ment, and robo-advisors. We proposed an analytical framework to evaluate the industry from the perspective of both portfolio management and efficient market theories, seeking to explain the ratio- nale of the foregoing transformations, and their implications to the sectors landscape. Furthermore, state-of-art academic papers, consulting firms reports, as well as public information extracted from asset management companies were employed to back-up our analysis and conclusions. We finally concluded that the industry is, in fact, moving towards the direction of an equilibrium point between passive and active, because, despite the rise of passive management, we still observe a significant competitive advantages in alpha-generation by some active hedge funds, what suggests their sustainability over the long-run. Moreover, we observe an increase in the [already high] industry concentration levels, which might have strong implications to antitrust regulations in the foreseeable future.File | Dimensione | Formato | |
---|---|---|---|
_Thesis__The_Rise_of_Passive_Management__digital_ (1).pdf
accessibile in internet per tutti
Descrizione: Tesi
Dimensione
10.11 MB
Formato
Adobe PDF
|
10.11 MB | Adobe PDF | Visualizza/Apri |
I documenti in POLITesi sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
https://hdl.handle.net/10589/151765