The global portfolio management system market is projected to witness a compounded annual growth rate of 10.17% to grow to US$26.440 billion by 2027, from US$13.424 billion in 2020. Portfolio management entails developing and managing an investment portfolio to meet an investor’s long-term financial objectives and risk tolerance. Active portfolio management entails buying and selling stocks and other assets strategically to outperform the market. Passive portfolio management attempts to match market returns by imitating the composition of a specific index or indexes. Portfolio management necessitates the ability to weigh strengths and weaknesses, opportunities and threats across the entire investment spectrum. Debt versus equity, domestic versus international, and growth versus safety are all trade-offs.
Key Drivers Driving the Market Growth
An increase in the emphasis on the fact-based planning process, a rise in the competitive marketplace, and an increase in the output level of resources are some of the primary drivers propelling the portfolio management system market. High costs and operational difficulties, on the other hand, are two major market challenges. Furthermore, increased demand from emerging prospective economies, as well as the introduction of new technologies, are expected to benefit the industry. Furthermore, the growing need for businesses to improve their business efficiency is propelling the portfolio management software market forward. Rising employment drives net flows of assets into funds managed by industry operators. As job growth increased so did disposable income available for investment in industry products.
Technological Advancements Are Going to Boost the Industry
The increasing technological advancements are expected to drive the global portfolio management system market. With more data flows to manage than ever before, businesses need access to a technological platform that offers comprehensive portfolio management systems. Planetly, a developer of carbon management software solutions, for example, launched an ESG portfolio management system for investors in February 2022, a new tool designed to help investors integrate ESG management throughout their investment portfolio firms and expedite ESG reporting. Furthermore, the increased allocation of companies to private market investments, as well as the unexpected economic upheaval and shift to remote work caused by the COVID-19 pandemic, has accelerated the need for technologies that provide greater transparency and enhanced data processing for asset classes. As a result, major market players are launching fully integrated technology tools to assist investors in making better investment decisions.
- Allvue Systems, a premier investment management technology solutions company, announced a major alliance with Mirador, LLC in December 2021 to help limited partners such as endowments, trusts, and pension funds manage their technology and processes more effectively. Mirador offers unbiased reporting, information management, and technical advisory services, leveraging best-in-class third-party reporting technologies to help customers identify benefits and threats in their portfolios. Mirador will support Allvue’s LP Portfolio Management (LPPM) solution, the company’s fully integrated system that allows limited partners to perform various office activities. Mirador, as a recognized services company, would advise LPs on how to get the most out of the LPPM system.
- Everence announced at its National Conference that it has partnered with Smartleaf Asset Management LLC to provide Everence clients with an enhanced direct indexing investment alternative that includes enhanced tax management and value-based investing options.
- YieldX, a cutting-edge electronic end-to-end solution for fixed-income investing, is set to launch in September 2020. With application-based solutions powered by artificial intelligence, the platform solves the many complexities associated with acquiring, allocating, and trading fixed-income securities. The system was created with YieldX Hub and YieldX API to assist registered investment advisers, broker-dealers, institutions, and fintech startups in improving their fixed-income services.
Cloud-Based Deployment Segment to Boost the Market
During the forecast period, the rising adoption of cloud analytics to improve business operations for small and medium-sized enterprises is expected to drive overall market growth. One of the major factors driving the market growth is the increasing demand for cloud-based solutions for managing large-scale projects. The deployment of cloud-based solutions is a virtual process that facilitates service delivery and allows the organization to access its data from any connected device at any time. These benefits are expected to drive market growth during the forecast period.
The majority of APAC countries are rapidly investing in solutions such as enterprise mobility and cloud computing. With the rapid adoption of these solutions, businesses are looking forward to implementing portfolio management methodologies to meet the needs of business optimization.
The global portfolio management software market was positively impacted by the COVID-19 pandemic. With the virus outbreak, the implementation of lockdown, the surge in digitalization accompanied by internet penetration, and the rise in job insecurity, people turned to the stock market for better returns and a backup source of income. As a result, the number of retail investors increased significantly during the pandemic. According to a survey conducted by Charles Schwab in early 2020, 15% of investors studied were new investors (referred to as generation investors) who began investing in the North American region in early 2020. Similar trends were observed around the world, particularly in the European and Asia Pacific regions.