Interview with Invesco boss: "Inflation is one of the most important issues"

What are the biggest challenges in asset management at the moment?

Markus Frühauf

Editor in business.

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Even before the Corona crisis, this was digitalization in addition to consolidation.

The Covid pandemic has brought us five years forward.

We are increasingly working from home and communicating more frequently and faster with our customers.

We can now meet with all of our customers in all regions of the world in the shortest possible time.

The development began before the pandemic, but it was accelerated enormously by the lockdown measures.

What will be the main consequences of the pandemic?

There have been notable advances in medicine, especially in the fight against viruses.

The American health system was also forced to improve its care.

Another consequence will be the possibility of working at home.

This will change the old pattern of everyday work and can create a better balance between work and private life.

These are very positive results.

However, working with colleagues and thus personal exchange with them is still important because this is how we learn from each other.

That is why we are currently seeing a growing need for employees in all larger companies to return to the office.

And what about the economic consequences?

Are you worried about inflation?

Certainly, inflation is one of the most important issues on the market at the moment.

I hardly have a conversation at the moment that does not address inflation.

There are staff shortages in the United States, for example in hotels and restaurants.

In order to get workers, higher wages are necessary.

Then there are the problems in the supply chains.

This will lead to a short-term increase in the inflation rate.

I assume, however, that the central banks are aware of this development and are preparing for it accordingly.

What about the growing national debt?

The aggressive fiscal support measures were undoubtedly necessary in the pandemic.

At a certain point, however, the debt level has to be looked at.

Rapid growth provides relief.

Nevertheless, expenditure cuts on the one hand and tax increases on the other must be examined.

I would like a combination of both.

However, politicians are currently still reluctant to take measures to inhibit growth.

But it cannot do that permanently.

Is further consolidation necessary in asset management?

I expect that.

However, consolidation has been an issue in asset management since the 1980s.

The reasons for further mergers are simple: Customers want fewer providers, digitization is forcing high investments, and the regulatory requirements are becoming more and more burdensome.

The effort for digitization and regulation in asset management has never been as high as it is now.

Consolidation can take place in two ways: organically, in which customers move to large, broad companies, or inorganically through mergers and acquisitions.

Will it happen more often?

Mergers are very complex and are not always honored on the market.

That is why such projects take a little time, which is why I cannot imagine a high dynamic in the near future.

How will Invesco behave in the context of consolidation?

We definitely have a history of takeovers like Oppenheimer's last time.

For us, the focus is on the capacities to serve customer needs.

If we can develop these ourselves, then we prefer that. If not, then we look around the market.