Succession Planning and Business Sustainability in the Investment Industry

In this special episode of the Global Investment Leaders podcast, Rosemont CEO Chas Burkhart is joined by Rosemont Managing Director Brad Mook to reflect on the firm's progress midway through this eventful year. One of the prominent themes discussed in this podcast episode was the idea of succession in the investment industry. While succession planning has always been a part of Rosemont's focus, they have witnessed an increase in conversations about this topic over the past year. Using their unique vantage point of partnering with many firms at various growth stages, Burkahart and Moot also discuss: The impact of the next generation's lower risk appetite on their willingness to take on equity ownership, considering factors like tax burdens, feasibility, and debt levels The sustainability challenges faced by investment businesses as the industry evolves and competition increases The growing complexity of investment decisions for allocators, intermediaries and clients, who now have numerous options to choose from The various risks involved with lack of succession planning, including unforeseen tragedies, incapacitation and chronic underperformance The expected elimination of excess capacity and mediocre performers in the industry within the next 5-10 years Managers' growing recognition of the need for sustainability and how to decide between proactive or reactive measures During the episode, the hosts also offer several strategies for achieving sustainability, including exploring new end-markets, adopting new vehicles (such as active ETFs or pooled vehicles) to supplement traditional mutual funds, and expanding product offerings to cater to clients' needs. By taking a solutions-oriented approach, less reliant on quarterly investment performance and with diversified client relationships, Rosemont has found that businesses tend to be more sustainable over the long run. This episode concludes with Burkhart and Mook expressing their belief that the investment industry will witness a surge of M&A activity as businesses seek to address succession challenges and enhance sustainability in an increasingly competitive landscape.
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