Instigating innovation: fund management entrepreneurs can take long-term opportunities from theory to reality

By Claude Kremer

In many ways, the investment industry is highly entrepreneurial. As markets expand and investment instruments proliferate, it has proved adept at seizing opportunities and developing new products and services.

In other ways, though, the industry has been overly conservative, particularly in addressing the rapidly growing need for long-term investments. Taking a different approach is always risky, but the current focus on short-term outcomes is not sustainable. Many investment firms could serve their clients better by developing long-term investment models that truly mirror their clients’ needs. By doing so, they will also become more robust and sustainable businesses.

Many investors seek short-term performance but they often end up disappointed. A long-term investment approach would lead to better investment outcomes for individual investors and thereby improve investor trust in the fund management industry. In the current context of an ageing population and state systems that are unable to provide adequate pensions, finding alternative solutions is essential. Investors need to increase their long-term savings to address this shortfall…

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