Geopolitics has replaced technology as the top concern for institutional investors and asset managers globally, though artificial intelligence remains the dominant long-term strategic focus, according to Institutional Investor’s Second Annual Global Asset Management Survey.
The survey of 375 industry respondents shows that over 70 percent of respondents — and 75 percent of investors specifically — now see geopolitical uncertainty as the greatest risk facing the industry over the next decade. This marks a shift from a year ago, when technology issues like cybersecurity and disruption from AI topped the list of respondent concerns.
Recession risk ranks second, with 44 percent of investors expressing concern about a potential global downturn (that figure goes up to 62 percent among investors in Asia). Less than six years after the onset of Covid-19, a health crisis ranks among the lowest perceived risks, cited by just 1.84 percent of respondents.
This concern over geopolitical risk is actively reshaping portfolios: Investors are reallocating toward domestically aligned assets. Despite strong public equity performance — more than 90 percent of investors reported their portfolios met or exceeded expectations — allocations to U.S. stocks remain modest at 7.8 percent overall.
Investor caution towards U.S. exposure is pronounced, with 40 percent of European and 34 percent of Asian investors planning to reduce their U.S. allocations, while only 1.5 percent of North American investors plan to increase their exposure to U.S. markets.
Meanwhile, Technology, AI, and data are the unequivocal long-term priorities. A combined 67 percent of respondents cited them as strategic imperatives: 37 percent for enhancing operations and client engagement, and 30 percent for investments.
While technology-driven disruption is cited by more than half of asset management leaders as a key source of uncertainty — more than double the level reported by investors and distribution executives — more than half of asset management CEOs view it primarily as an opportunity.
AI already influences decisions for 60 percent of investors and managers, who use tools like ChatGPT trained on internal data. Meanwhile, over 30 percent of asset management firms have automated core systems like compliance and reporting to reduce costs, with half expecting a smaller workforce as a result.
While only around one-third of surveyed investors report using AI today, most commonly for internal software development, more than 85 percent plan to adopt AI for portfolio construction. Most asset management leaders already use AI to find investment opportunities and to gather and organize raw data.
Investor commitment to private equity is persisting through a period of disappointing returns. While 43 percent of investors globally — and 51 percent in North America — reported their private equity portfolios fell short of expectations, demand remains resilient. Nearly a third (28 percent) of investors globally plan to increase their allocations, and 43 percent expect to maintain current levels, ranking it second for future allocation after private credit. This is not a passive hold; in North America, 57 percent of investors are adding new managers and over 40 percent are committing more capital to existing relationships.
ESG considerations continue to be integrated into investment frameworks. A majority of investors globally treat factors like climate risk as material for long-term risk and fiduciary duty, suggesting a shift from political signaling to embedded practice.
The survey also highlighted strong performance in private credit, where 87 percent of investors reported their investments met or exceeded expectations over the past 18 months, driving plans for increased allocations.
II’s Second Annual Global Asset Management Survey was conducted in fall 2025, polling 375 institutional investors and asset managers globally. The analysis examined portfolio allocation, decision-making, and strategic risks by geography and distribution channel.
