Prosek’s Leaders Predict…
Mark Kollar, Josette Thompson, Mickey Mandelbaum, Mike Geller, Andy Merrill, Neil Goklani, David Wells, Fiona Laffan
From rising tension with Iran to Megxit, we all agree that 2020 has already ushered in the new decade in an unexpected fashion. What else does the new year have to offer? The leadership team at Prosek Partners took a look at their crystal balls and has the following predictions to share with our readers.
Regardless of whether you agree with it or not, the killing of Maj. Gen. Qassim Suleimani and the likelihood that Iran will seek retaliatory action against US interests—including targeting high-profile Americans—will be remembered in the years to come as the geopolitical event that marked a critical turning point in both US – Middle East relations as well as, potentially, the world order. For Prosek’s clients, the ensuing uncertainty will cast a dark shadow over the markets for the foreseeable future and create an extremely challenging trading environment that will truly test the investment prowess, discipline and, ultimately, the viability of many investment firms which had, until now, benefited greatly from a seemingly bullet-proof market. ~ Mickey Mandelbaum, Partner
In a tongue-in-cheek way (and not meaning to be exclusionary), I coined 2019 the year of “black is the new black” meaning that I saw a lot more open discussion and real focus on diversity, equity and inclusion (DEI) particularly within corporate environments, that I had not seen before. As a black female senior business leader who works within the financial services industry and who is passionate about solving diversity issues, my expertise was sought after from more clients aiming to crack the code on DEI than ever before. The increased interest in diversity, in particular, creating corporate environments where employees can feel a sense of true belonging, will definitely continue in 2020. In fact, a recent Glassdoor survey shows that 64% of employers are expected to step up their investment in D&I this year when it comes to making hires related to this area. In addition, companies will be increasingly challenged to put their money where their mouths are by investing in training and technology that has real impact on the recruitment and retention of diverse employees from the most junior to the most senior levels. We’ve seen the explosion of Com-Tech within the communications industry in 2019 and I predict that in 2020, D&I tech, like Pluto, the cutting-edge platform that Prosek has rolled out, will see a boost while more start-ups will come on the scene with technology that can help analyze data and provide insights that can help organizations truly move the DEI needle. ~ Josette Thompson, Managing Director
The focus on ESG will increase in 2020 with more and more asset-management firms considering not only the way they review investments, but also how they operate as a business themselves. The ticking clock on this subject will not be wound by climate change alone but diversity, pay and governance, to name just a few factors. ~ Mark Kollar, Partner
Alternatives to Shareholder Primacy in the purpose of a corporation will continue to evolve and greater clarity will be achieved in redefining the role of the corporation and its board of directors. This will reset performance metrics for not only shareholder returns, but societal returns like environmental and sustainability, against which managements and boards are evaluated and compensated. ~ Andy Merrill, Partner
Marketing in 2020 will increase efforts to show how purpose demonstrates measurable impact within organizations. The shift will take place from simply talking about purpose in ads, to actually demonstrating how actions with purpose deliver a measurable impact on results and positive customer experience. ~ Neil Goklani, Managing Director and Head of Marketing
This will be a public year for private equity and private credit. The big driver of interest will likely be the US Presidential election, but we will also see media interest in the more usual run of fundraising, acquisitions and exits rising. Additionally, we expect PE and credit firms to use more digital tools as they look for leads and raise money including video and podcasts. Finally, we hope to see more pension funds explaining why they invest in private equity and credit and for people to have a greater understanding of the positive impacts these businesses have on the economy and the communities in which they operate because the firms themselves are more transparent about their work. ~ David Wells, Partner
Two ideas that are circulating in the asset management community, that I believe will happen in 2020, include:
- By 2029, the largest asset manager in the world will be Chinese. This mega shift will take place via strategic acquisitions of foreign asset managers who are struggling and / or need to find ways to compete / scale. According to McKinsey, AUM in China is expected to grow more than 17% annually over the next five years, mutual funds within the country are still nascent / minimal, and there is more than $4.5 trillion in their domestic shadow banking system.
- A significant amount of capital will be deployed by a coalition of global asset managers to support climate change solutions. Measuring the impact of climate change and its impact on investors’ portfolio holdings will intensify. Specific ESG climate ratings will be assigned and that rating will be viewed as a critical benchmark. ~ Mike Geller, Partner
2020 will be the year that businesses operating in Britain are finally able to start returning to business as usual and contemplating a post-Brexit future. With an unexpectedly clear majority for the Conservative party in the December general election, the uncertainty around Brexit has substantially reduced and large firms who have already spent millions on contingency planning will begin to execute their plans. Investment decisions that have been on hold due to Brexit uncertainty will start to move forward and the London property market will begin to build momentum again. Brits will finally be able to talk about more interesting topics like the Tokyo Olympics and Euro 2020 rather than arguing about Brexit all of the time. And, our favourite topic of conversation - the weather! ~ Fiona Laffan, Managing Director