Supermodel II: The need for speed becomes a race for survival

Mark Stockley, Chief Business Development Officer

The asset management industry has entered a speed war, with managers converging on new battlegrounds in search of growth. Constant market shocks, rising competition and the need to pivot rapidly between strategies have pushed firms into what, in Supermodel II, we’re calling an operational ‘red zone’: a point where rising complexity is pushing operating models to their limits.

Across public and private markets, the message is clear: speed is no longer a ‘nice to have.’ It has become a competitive differentiator – and in the race to dominate emerging asset classes, only the fastest will survive.

Squeezed margins apply pressure

Margins continue to tighten across both public and private markets, underlining the need for urgency to capitalise on market opportunities quickly and efficiently.

While active public markets funds remain most affected, according to our survey findings, a growing proportion of industry leaders now believe private markets funds are coming under greater strain. Competition in private markets is rising sharply, compressing fees just as valuation multiples move downward and the operational costs of regulatory compliance rise.

Interestingly, managers report attributing slightly less margin pressure to regulatory burdens in 2025 than in 2024– but rising costs and competitive dynamics continue to squeeze profitability regardless. As a result, more firms are outsourcing valuation and governance functions to protect margins and refocus internal resources on growth.

A talent gap is slowing product innovation

Active ETFs and evergreen private markets funds are seen as the fastest growing opportunities, but both require specialist knowledge that most firms simply do not have in-house.

Our data shows that only 23% of managers planning to launch active ETFs in Europe feel confident they have the necessary operational expertise and resources to support them. Confidence is even lower for evergreen private market vehicles (18%).

This capability shortfall is driving reliance on third-party management companies (ManCos). More than a third of managers (34%) expect to fully outsource to a third-party ManCo to support new products over the next two years – up from 29% in 2024.

As one European public markets operations executive puts it: ‘An ETF is 75% the same as a mutual fund, but the 25% of the work that’s different is around setting it up with your service providers, how you market them and how you distribute the product. So it makes sense to find a partner who can help with the time to market, complexity and knowledge.’

For many managers, expertise is not just a barrier – it’s a bottleneck. And bottlenecks kill speed.

The growing drag of slow speed to market

Even as margins compress and competition intensifies, most firms still struggle to launch products quickly enough to win:

• 60% of managers say they need to be faster at launching funds
• 63% report that a typical fund launch now takes 10–12 months or longer
• Legal and regulatory administration, along with due diligence on distribution partners, remain the least efficient stages of the process

Only 42% of large (>€50bn) and 33% of smaller firms (<€50bn) say speed to market is a strength of theirs.

In the active ETF space, the stakes are even clearer. As one global private markets operations executive explains: ‘The economics of the ETF business tell us that the first few products to market gather most of the assets. So you need to develop a process that goes from ideation to launch very quickly to make sure you’re in the gold and silver medal positions.’

For many firms, the answer lies in partnering with third-party ManCos who can navigate regulatory processes and avoid what one executive calls the ‘registration swamp.’

The operational ‘red zone’ putting the brakes on

Looking at what slows down launches, managers tell us that fund registration consistently ranks as the area with the greatest potential for efficiency gains. Growing regulatory burdens, jurisdictional differences and fragmented documentation standards frequently delay approvals – sometimes by months. This operational complexity ‘red zone’ is where an increasing number of firms will find themselves as competition heats up.

Third-party ManCos can help to solve this by providing established regulator relationships, standardised workflows and repeatable processes. As the same operations executive notes, ‘Speeding up can involve third-party ManCos who’ve got great relationships with the regulators.’

The firms best positioned to win the speed race are those who can industrialise and streamline the entire launch lifecycle.

Speed is now strategy

The asset management industry has long focused on performance, distribution strength and product breadth as key competitive attributes. But the emerging reality is unmistakable: speed has become critical.

Whether targeting active ETFs, evergreen private markets or thematic opportunities, managers who can transform ideas into investable products the fastest will consistently capture the lion’s share of new assets.

In a race where only gold and silver medals count, speed to market is no longer just about operational efficiency – it’s about competitive survival.

For more, download our Supermodel II report.

All references are to Supermodel 2025 data, unless otherwise given.