Transforming the demographic challenge into a profitable chapter for financial asset administrators
In an era of demographic shifts, the financing of the 'silver economy' - a rapidly expanding system serving ageing populations - has become a pressing concern. The World Economic Forum has highlighted a significant capital gap in this sector, and European asset managers are poised to seize the opportunity by adopting strategic approaches that leverage demographic trends, product innovation, and modern distribution channels.
Younger investors are starting their investment journey earlier, and the silver economy is opening long-term investment opportunities across healthcare, social infrastructure, mobility, and assisted living. Asset managers should develop innovative investment products aligned with these demographics, such as hybrid funds, social infrastructure vehicles, and thematic ETFs focused on healthcare, mobility, and assisted living. These products provide scalable investment paths into sectors critical to the silver economy while appealing to different investor generations.
The European Long-Term Investment Fund (ELTIF) framework, especially post its 2.0 reform, offers a regulatory infrastructure ideal for creating private-market-focused funds geared toward younger investors who are planning their financial futures and wish to contribute to systemic resilience related to ageing societies.
Embracing digital platforms for investor engagement is crucial in reaching upcoming generations. Traditional distribution channels are insufficient for this purpose. Developing and utilizing user-friendly digital platforms that channel retail capital into private markets enable faster connection, conversion, and scaling of investments into the silver economy.
Recognising and facilitating the shift from public safety nets to individual capital responsibility in ageing populations can also benefit asset managers significantly. Sectors like age-adapted housing, care infrastructure, and assisted mobility are often treated as sub-themes within broader multi-asset funds, rather than standalone strategies. Targeting investments toward these industries offers both social impact and strong investment returns aligned with demographic trends.
Portfolios focused on alternatives should reshape retail strategies, form partnerships with digital investment platforms, and simplify access to alternatives to remain aligned with the major structural growth driver that is the silver economy. Accessible private market funds are becoming a fundamental part of any investment portfolio.
Trust in asset managers hinges on product clarity, transparent fees, well-defined liquidity profiles, and credible ESG credentials. Asset managers who prioritise these factors stand to gain the trust of investors seeking to capitalise on the silver economy. The demographic window for capitalising on this opportunity is opening and will not stay open forever, making it crucial for asset managers to act now.
The author of this article, Mike Delano, Asset & Wealth Management Leader at PwC Luxembourg, emphasises the importance of these strategies for European asset managers looking to capitalise on the silver economy and generate sustainable growth in ageing societies.
- In light of the growing silver economy, asset managers should consider creating innovative investment products like hybrid funds, social infrastructure vehicles, and thematic ETFs focused on healthcare, mobility, and assisted living to attract investors of different generations.
- Leveraging the European Long-Term Investment Fund (ELTIF) framework, particularly post its 2.0 reform, private-market-focused funds can be developed, appealing to younger investors who are planning their financial futures and wish to contribute to systemic resilience related to ageing societies.
- To gain the trust of investors seeking to capitalise on the silver economy, asset managers should prioritise product clarity, transparent fees, well-defined liquidity profiles, and credible ESG credentials while reshaping retail strategies, forming partnerships with digital investment platforms, and simplifying access to alternatives.
