The investment management industry in 2026 is pivoting toward differentiated product structures and leveraging technology, creating three core avenues for investment opportunity, as profit growth in traditional segments remains challenging. According to a Deloitte report, the investment management industry enters 2026 facing a paradox: while straightforward profit growth remains difficult, the opportunities for strategic differentiation have rarely been greater. This divergence is driven by three powerful, interconnected forces: The cost-driven migration of investors toward low-cost and ETF vehicles, the growth pivot into alternatives, particularly private markets, and the accelerating integration of Artificial Intelligence from isolated projects to core enterprise platforms. Simultaneously, mounting technology costs, complex compliance obligations, and increasing distribution complexity are forcing firms to fundamentally overhaul their operating models, talent strategies, and product architectures to secure long-term scale and profitability.

The Active-Passive Hybrid: Active ETFs: The rapid surge of Active Exchange-Traded Funds (ETFs), which captured 26% of total U.S. ETF net inflows in 2024, signals a structural shift. Active ETFs combine the tax efficiency and liquidity of the ETF wrapper with professional active management. Investors stand to benefit by allocating capital to funds that offer superior alpha generation potential while maintaining lower costs and easier trading access than traditional mutual funds. This trend is a strategic response to sustained outflows from legacy active mutual funds.

Accessing Illiquidity and Innovation (Private Markets & Tokenization): The private markets segment is poised for growth, contingent on factors such as tariff stability, which can accelerate deal activity and stabilize valuations. Key opportunities arise from:

• Regulatory Easing: The rescission of prior Department of Labor guidance and SEC clarity now support the inclusion of alternative investments (like Private Equity and Private Credit) in 401(k) plans and the creation of semi-liquid closed-end funds (Interval Funds and ELTIF 2.0) for retail access.
• Strategic Partnerships: Investors can follow the lead of life insurers and alternative managers who are forming strategic partnerships (e.g., Legal & General/Blackstone) to access permanent capital and specialized credit origination platforms.
• Tokenization: Increasing regulatory clarity around digital assets (like stablecoins via the GENIUS Act) is facilitating the launch of tokenized funds, offering fractionalization and 24/7 liquidity, particularly benefiting investments in private assets.

Scaling AI for Alpha and Efficiency: Firms that successfully scale AI from isolated experiments to enterprise-wide platforms will gain a significant competitive edge. Investment opportunities exist in firms demonstrating:

• AI-Enhanced Distribution: Using AI (including generative and agentic models) for client communication and lead generation, leading to accelerated asset gathering.

Portfolio Disruption: Firms using AI agents to analyze sector dynamics and assess risks (e.g., Schroders’ virtual investment committee), potentially disrupting the core of active investment management and improving returns. This creates an opportunity to invest in asset managers that successfully integrate these high-ROI technologies

End Notes

Source: https://www.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-outlooks/investment-management-industry-outlook.html