Sandro Pierri0:10
It's a great pleasure to see the room full. I'm looking forward to what I think will be two very interesting days on topics central to a well-functioning fund and asset management industry. On behalf of the AMA team, we're very proud to present a first-class lineup of speakers and a diverse program. Before starting, I want to thank our media partners, sponsors, and the AMA team for organizing this event. Let me make a few remarks to set the scene from an industry perspective. We are in a very different macro context than in recent years. Everyone talks about the sustainability transition, but the reality is we will face what I call the multiple transition – the first time since WWII that we're seeing such a significant, structural economic change, with four transitions happening simultaneously. First, sustainability: we need an additional $3.5 trillion to support net-zero, 200 million jobs created and 200 million eliminated, making a just transition critical, and finance's role is key. Second, the technological transition, with AI and generative AI. Third, the demographic transition: global population will rise to 11 billion by 2030, but growth masks polarized geography – developed markets are already declining, Europe included; the working-age population (25-64) has been declining, impacting fiscal policy. Millennials are aging, changing savings, investment, and consumption patterns. Fourth, the geopolitical transition: the old balance of cheap labor, cheap energy, and cheap international trade is gone. The new balance is unknown. This is a unique moment with four simultaneous disruptions, some reinforcing, some contradicting. Three long-term consequences: structurally higher volatility (affecting liquidity management), lower GDP growth (especially in developed countries), and higher inflation – from lower for longer to higher for longer. For our industry, past growth was partly driven by asset performance; going forward, growth will be lower, competition for flows will intensify, margins will be under pressure from passive shift, and cost inflation is new. It's one of the most interesting and challenging times for our industry. Yet we are a key capital transmission mechanism, helping investors achieve long-term goals and providing stable funding for governments, companies, and projects. The positive angle: only one-third of European household assets are professionally managed, so attracting capital and transforming savers into investors is a long-term driver, needed to fund Europe's sustainability and digital agendas. It's crucial for Europe to progress on Capital Markets Union that works for people and the financial industry. I congratulate the Commission for its determination; good progress has been made on the AIFMD review (delegation framework unchanged, good; liquidity management tools welcome), ELTIF 2.0 (potential to unlock retail investment in real assets, awaiting ESMA details), and the MiFID review with momentum on consolidated tape for ETFs and equities. But more work remains ahead of the next European election. Key unfinished files: the retail investment strategy – we agree on the objective to attract more EU savers, but the current draft focuses too much on cost and may miss the mark; incentives, including tax incentives, are crucial. ESG ratings proposal is welcome for transparency and quality, but data provision remains unregulated. Good progress on CSDD, EMIR, and euro clearing. Overall, we need to accelerate critical files. For the new Commission, four priorities: boost retail participation and promote retirement investment; improve the sustainable finance framework (SFDR review); advance more efficient, stable, competitive capital markets; and make competitiveness central to all EU policy. Let me conclude: the asset management industry is key for capital allocation; we must work constructively with policymakers to serve clients and support policy objectives. The industry is in good shape, with high-quality staff and professionalism. But it's critical that European industry becomes more competitive globally, creating European champions with economies of scale. My regulatory recommendations: predictability and stability of the regulatory framework; coherence between regulations – e.g., how the retail investment strategy favoring passive instruments reconciles with supporting the green transition; and ensuring the asset management industry continues to thrive as a capital transmission mechanism to support policy objectives.
