Kaizen Recruitment recently hosted its Melbourne Funds Management Executive Roundtable, bringing together senior leaders from across the investment management industry for an open discussion on the changing funds management landscape.
We would like to thank executives from the following organisations for their time and contribution to the discussion:
Acorn Capital
AllianceBernstein
Bennelong Funds Management
Copia Investment Partners
IFM Investors
Janus Henderson
L1 Capital
La Trobe Financial
MaxCap
RMBL Investments
U Ethical
VFMC
Australia's funds management industry continues to weather a period of strategic change. The discussion highlighted an industry evolving rapidly, with growth increasingly concentrated in particular strategies and business models. There is no single winning model: while some areas of funds management have experienced strong growth, traditional active management remains challenging. This is placing increasing emphasis on AI adoption, product innovation, transformation of distribution, private markets and ETF expansion, operating efficiency, and changing ownership models, all reshaping how managers compete.
Key Insights
AI investment is moving from experimentation to disciplined commercial application.
AI implementation is creating capability requirements, not simply removing roles.
Private credit and ETFs continue to attract growth.
Global managers need ways to access greater local relevance in Australia.
Trust remains central to investor confidence and sustainable distribution.
Content Outline:
How Is AI Changing Funds Management?
There was a sense that the industry may be approaching an inflection point between the cost of implementing AI and the tangible benefits it can deliver.
Some firms are becoming increasingly disciplined about where they invest, focusing on use cases that create genuine productivity or commercial benefits rather than adopting technology simply because it is available.
Governance remains a significant consideration. Leaders discussed data security, confidentiality, oversight and the need to understand how AI-generated outputs are being used within their organisations.
Is AI Reducing Headcount in Funds Management?
The discussion did not suggest that AI is currently resulting in widespread headcount reduction. In some instances, adoption is actually creating additional work and new capability requirements. For instance, senior funds management leadership and subject matter expertise are required to implement these programs of technological and transformative change.
The conversation also extended beyond how fund managers themselves use AI to how their customers are using it. Investors are increasingly turning to AI tools to ask questions about investments, funds and financial decisions, driving the need to transform marketing and distribution strategies to ensure products reach their intended audience.
That creates a new challenge for fund managers: when an investor asks an AI platform about your fund, your investment strategy or your competitors, how well is your business represented?
At the same time, greater access to automated information may make the human element even more important. Trust, expertise and the ability to have a credible conversation with investors remain difficult to replicate.
Where Are Funds Managers Finding Growth in 2026?
There was considerable variation in how firms around the table are experiencing the market. Some areas continue to perform strongly, particularly private credit and ETFs, while raising capital for more traditional active strategies remains difficult.
Despite these challenges, there was a view that active management is cyclical rather than structurally obsolete, and that opportunities will return. However, simply waiting for the cycle to change is unlikely to be enough.
Product innovation is increasingly becoming a necessary part of growth strategy. Private markets, ETFs, new distribution channels and different investment structures are changing both what fund managers offer and how they compete. Senior executives shared observations around best-in-class managers utilising M&A strategies, diversification of product suites, or continued cost-out mechanisms to ensure their businesses remain competitive through the current investment cycle.
This raises an interesting question:
Are we genuinely seeing consolidation across funds management, or the emergence of fundamentally different business models?
What Challenges Do Global Fund Managers Face in Australia?
Global scale provides significant advantages across investment capability, technology, product and resources. However, the Australian market has its own characteristics, particularly across superannuation, platforms, advisers, regulation and fee structures.
This can create tension between the efficiencies of a global product strategy and the need to develop bespoke solutions for Australian clients. Successful global managers increasingly need to find the right balance between leveraging global capability and providing sufficient local autonomy to respond to the Australian market.
One leader in attendance observed that some lesser-known global brands are effectively "renting trust" in the Australian market through family office networks, adviser channels, media partnerships and established distribution relationships. This can provide market access and credibility while the manager develops its own local profile. However, long-term success still requires a clear understanding of Australian investors, intermediaries and regulatory expectations.
Is the Australian Funds Management Industry Consolidating?
M&A and ownership structures remain firmly on the agenda across funds management. The group discussed the continued role of consolidation, private capital and strategic ownership in providing businesses with the capital and support required to invest, innovate and grow.
Different ownership models bring different advantages and pressures. Well-capitalised private ownership can provide businesses with the ability to invest through cycles, while listed, boutique and global models each create their own strategic considerations.
Why Does Trust Remain Critical in Funds Management?
Regardless of ownership structure, technology or product innovation, one of the simplest themes to emerge was also one of the most important: success in funds management continues to be underpinned by trust.
Investors need confidence in the people managing their capital, the investment proposition and the organisation standing behind it. As technology changes how investors access information and how fund managers operate, maintaining that trust may become more important, not less.
There was a strong consensus that poor practices and regulatory issues that draw press attention to investor losses do far more damage to the trust of all investor cohorts, posing a genuine risk to maintaining (let alone improving) market footholds.
What Do These Changes Mean for Leadership Capability?
These shifts are also changing the leadership capabilities funds management businesses require. Technology transformation must be supported by strong governance, operational discipline and subject matter expertise to compete commercially. At the same time, product innovation and distribution growth require leaders who can translate investment capability into a credible and differentiated market proposition.
Senior leaders who bring exposure across a breadth of operating models, asset classes and scale will remain in high demand as new combinations of specialist investment management expertise continue to emerge.
What Will a Successful Funds Management Business Look Like in Three to Five Years?
The roundtable concluded by considering what a successful funds management business might look like in the next three to five years.
Successful firms are likely to combine clear investment capability, product innovation, disciplined adoption of technology, efficient operating models and strong distribution, all while preserving the human relationships and trust that underpin investor confidence and remain fundamental to the industry.
We thank all participants for the openness of the discussion and their generosity in sharing their experiences and perspectives.
Matt McGilton is Managing Director at Kaizen Recruitment, Australia's specialist financial services executive search firm. He has recruited senior investment management and executive talent across financial services for over 20 years in investment management and organised this roundtable discussion.
Frequently Asked Questions
What are the major trends shaping Australian funds management in 2026?
Australian funds management is being shaped by AI adoption, product innovation, private markets, ETFs, evolving distribution models, M&A activity and increasing pressure on operating efficiency. Managers are also balancing technology investment with the continuing importance of human expertise, investor confidence and trusted relationships.
How is AI being used in funds management?
Funds managers are becoming more disciplined about AI investment and are prioritising use cases that produce measurable productivity or commercial benefits. Key considerations include data security, confidentiality, governance, oversight and how AI-generated outputs are used within the organisation.
Is AI reducing headcount in the funds management industry?
The roundtable discussion did not indicate widespread AI-led headcount reduction. In some organisations, implementation is creating additional work and demand for new capabilities, particularly where senior leadership and subject matter expertise are required to govern technology and transformation programs.
Where are funds managers finding growth?
Roundtable participants identified stronger conditions in areas including private credit and ETFs, while capital raising for more traditional active investment strategies remains difficult. Product innovation, new investment structures and alternative distribution channels are becoming increasingly important components of growth strategy.
Is active funds management in structural decline?
The discussion suggested that active management is cyclical rather than structurally obsolete. However, managers cannot rely solely on a change in the investment cycle. M&A, product diversification, differentiated capability and continued cost management are among the strategies being considered.
What challenges do global fund managers face in Australia?
Global managers benefit from scale, technology, investment capability and resources, but the Australian market has distinct requirements across superannuation, platforms, advisers, regulation and fee structures. Successful firms need to balance global efficiency with sufficient local autonomy and market relevance.
Is the Australian funds management industry consolidating?
M&A, private capital and strategic ownership remain prominent across funds management. Different ownership structures can provide access to capital and capability, although listed, boutique, private and global models each create different strategic opportunities and pressures.
What will successful funds management businesses look like in the future?
There is unlikely to be one winning business model. Successful firms are expected to combine credible investment capability, product innovation, disciplined use of technology, efficient operating models and strong distribution while preserving the human relationships and trust that underpin investor confidence.
