2025 Asset Management Industry Outlook
Navigating the Industry’s Economic and Operational Opportunities
How are U.S. asset managers viewing the market, investment opportunities, and their strategies for 2025, in light of an evolving political landscape, the fed funds rate and long-term interest rates, continuing inflationary pressures, enduring global conflicts, and growing adoption of generative artificial intelligence (GenAI)?
KPMG LLP (KPMG) conducted a new survey following the December 17-18 Federal Open Market Committee (FOMC) meetings, to explore how firms are adapting to the current environment and planning for the future. Where appropriate, we also compare their outlook with the findings from our previous KPMG surveys (2024 outlook and July 2024 pulse survey). Responses were collected from more than 100 asset management professionals in the U.S., representing private fund managers, traditional fund managers, publicly traded entities, and institutional investors, investing across various asset classes including real estate, hedge funds, private debt, private equity and public securities. Over a third (36 percent) were in the C-suite or managing partners, with the remainder holding other executive and senior management positions. Nearly 45 percent manage assets totaling $5 billion or more in assets under management.
Explore the 2025 Asset Management Industry Outlook for findings
Discover the trends that are shaping the industry
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Key insights from our survey:
Top signals for a favorable transaction environment
Survey respondents believe that stable market conditions (55 percent) and reduced financing costs (54 percent) are the key signals asset managers are looking for to determine if the environment for transactions is becoming more favorable.
Private debt and private equity continue to lead as top ROI picks
Survey respondents believe that private debt and private equity are anticipated to offer the greatest return on investment (ROI) over the next three years (36 percent and 31 percent, respectively), echoing the results of our last surveys as the top selections.
Interest in data centers continues to grow
Within the real estate sector and asset classes anticipated to offer the most meaningful returns, data centers have drawn considerable interest, climbing from 27 percent since our last survey to 40 percent in the 2025 outlook; that’s second to residential/build-to-rent property at 47 percent, which continues to remain the top asset class from our last survey. Although the use of artificial intelligence (AI) and GenAI has not yet fully blossomed, there is rising interest in data center investments due to property needs associated with housing the infrastructure and equipment to support advancements in AI and integration.
The robust development of industrial product over recent years to meet increasing demand resulted in an oversupply of inventory. That is the primary reason for the dip in industrial since our last survey. The industry has quickly reduced construction starts, and supply and demand is working it's way back to equilibrium.
AI maturity is rising
The maturity journey of AI continues to evolve. Our survey shows the shift from the conceptual stage (39 percent in our July pulse survey, 33 percent in this survey) to the developmental stage (26 percent in our July pulse survey, 39 percent in this survey), indicating progress is being made to advance AI capabilities and coordinate efforts across the organization.
Shift in work arrangements post-pandemic
The vast majority of asset management firms have adopted hybrid work arrangements, with 69 percent of respondents permitting a mix of office and remote work. However, while hybrid work is likely here to stay in some capacity, the pendulum appears to be swinging back towards more full-time, in-office work. An increasing percentage of companies are requiring their employees to come back to the office full-time (27 percent in this survey versus 19 percent in our last survey). We expect this trend to continue as employers feel that having employees back in the office facilitates employee engagement, team building, and a mentoring culture, along with boosting productivity.
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