Following the launch of our Financial Services Yearbook 2026, we’re taking a closer look at some of the key themes shaping the industry.  

The investment management sector enters 2026 facing a familiar blend of challenge and opportunity. Market conditions remain unpredictable, competition is intensifying, and regulatory expectations continue to rise. Yet firms that adapt quickly, and invest in the right capabilities, are well positioned to capture new sources of growth.

Adapting to shifting market dynamics

The past year highlighted just how uneven performance can be across asset classes and regions. Fee pressure persisted, particularly in active strategies, while investors continued to demand better value and clearer evidence of performance. At the same time, demographic shifts and increased engagement from younger investors are driving demand for more accessible, digitally enabled products.

Against this backdrop, firms need to sharpen their propositions, modernise operations and ensure their governance frameworks keep pace with the complexity of today’s markets.

Private markets move centre stage

Private equity, private credit, infrastructure and real assets continue to attract growing allocations as investors seek diversification, inflation protection and greater returns. Improved fund structures and clearer disclosures are helping widen access, but success in private markets requires more than simply expanding product ranges.

Robust valuation processes, transparent communication and strong oversight are essential, particularly as liquidity and pricing uncertainty remain key considerations. Firms that build disciplined, evidence-based valuation frameworks will be better placed to scale responsibly.

Valuation discipline under sharper scrutiny

The FCA’s 2025 review placed a renewed spotlight on valuation practices for unlisted Level 3 assets. In 2026, firms should expect closer scrutiny of methodologies, independence of challenge and the traceability of assumptions.

Clear documentation, regular calibration to market data and stronger alignment between valuation, risk and oversight teams will be critical. High-quality data pipelines and scenario analysis will increasingly differentiate firms that can demonstrate resilience and credibility.

Consolidation and cost efficiency remain defining themes

Consolidation across asset managers, wealth platforms and listed investment companies is set to continue as firms seek scale, broader product offerings and shared infrastructure. Cost efficiency remains a priority, with cloud-based systems, shared service models and AI-enabled automation helping streamline middle and back-office functions.

At the same time, fund tokenisation is emerging as a significant area of innovation within the sector, with the potential to improve liquidity, enhance transparency and broaden investor access.

Boards of investment trusts are also likely to review management fees, discount control strategies and liquidity options more closely to protect shareholder value.

Looking ahead

2026 will be a pivotal year for investment managers. Those who succeed will navigate volatility with discipline, balancing responsiveness to market shifts with conviction in their core investment approach. Strong valuation practices, operational efficiency and disciplined use of technology will remain essential.

Success will also depend on aligning products to a changing investor base. Firms that invest in high-quality data, scalable infrastructure and robust risk and governance frameworks will be best placed to deliver sustainable growth and direct capital towards the sectors shaping the UK’s future.

You can read more in our Financial Services yearbook here.

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