Hello!

It looks like we are headed into another busy summer. Regulation, inflation, pending elections, and industry shifts like T+1 continue to drive activity and conversations.

Our London office recently celebrated its 50th anniversary and it was a great moment to reflect on the history of our footprint in the U.K. It was also a good time to think about the industry trends that continue to disrupt market players and change the landscape over the longer term.

I wanted to write briefly about three of these trends that we believe may shape the financial services landscape for the next 50 years. They are disrupting the investment landscape, changing the ways that investors access investment product, and objectively aiming to drive greater efficiency in capital markets.

ETF F.O.M.O. – You might have seen that BBH recently launched the 11th Annual Global ETF Investor Survey. Across the U.S., Europe and Asia, asset managers are rapidly assessing their ETF strategy and business case. It will not be for everyone, but the ETF is moving beyond its passive beginnings into an active world. Passive is still massive, but active is increasingly attractive. New investor channels are emerging and established private banks and wealth managers are looking at new ways to incorporate ETFs into their portfolios. ETFs have reached $12.7 trillion, and it feels like it is only the end of the beginning.

Broadening Access to Private Markets – This was the title of a 2023 report from the World Economic Forum. Never has this been truer across a multitude of asset classes including private equity, private credit, infrastructure, and real estate. For more than a decade, private markets have enjoyed a remarkable period of sustained growth. Regulation in Europe and the U.S. is driving the democratization of private markets – and we are seeing increasing interest in launching structures like ELTIFs, LTAFs, QIAIFs, and BDCs. Will these structures be the next flow of investment capital into private markets?

T+1 and Beyond – The move to shorter settlement cycles is driving the markets to more efficient and timely settlement through increasing automation, and demand for real-time data is increasingly prevalent. Earlier this year, BBH announced the evolution of our Infomediary Data Solutions offering to help clients with their data challenges. T+1 – and the necessary data management – continues to be one of the most popular topics of discussion across our client relationships, ranging from efforts to reduce failed trades to liquidity management. Looking further out, how long will it be before we see markets moving to T+0, or even a world of tokenised assets with frictionless settlement? We will be continuing the discussion as the impacts of the U.S. transition unfold and global plans advance.

Our teams are well equipped to engage on any of these topics and we look forward to hearing your views and perspectives on these evolving trends.

Andrew Craswell
Principal and Head of Relationship Management in Europe
andrew.craswell@bbh.com