Technology and cybersecurity have emerged as the leading concerns for asset managers over the coming year, even as firms report rising exposure to market, credit, liquidity and concentration risks, according to a global survey commissioned by Clearwater Analytics.

The study, The Crowded Trade, surveyed 250 senior executives at asset management firms across the United States, Europe and Asia-Pacific. Conducted in April and May 2026 by research firm Pureprofile, it covered managers active in equities, fixed income, multi-asset strategies, private markets, hedge funds and insurance assets.

Market risk recorded the most widespread increase, with 80 percent of respondents reporting higher exposure over the preceding 12 months. However, when asked about their greatest concerns for the year ahead, 62 percent identified technology and cybersecurity risks, compared with just 28 percent citing market risk.

The findings suggest that asset managers are increasingly concerned not only about developments in financial markets, but also about their ability to manage portfolios and operations as complexity increases.

Investment Risks Rise Across the Board

The survey points to a broad increase in perceived investment risks. Some 77 percent of respondents reported higher credit risk, with 51 percent describing the increase as dramatic. Liquidity and concentration risks had each increased for 71 percent of respondents, with 36 percent and 29 percent, respectively, reporting dramatic increases.

The figures reflect respondents’ assessments of changes in their risk exposure rather than independently measured changes in portfolio risk.

Chris Sturhahn, Head of Product, Asset Management at Clearwater Analytics, argues that the simultaneous increase across several risk categories presents a particular challenge for investment firms.

“Market, credit, liquidity, and concentration risk are all rising at nearly every firm that responded,” says Sturhahn. “That’s a harder problem than any one risk moving by itself.”

According to Sturhahn, managers are responding by expanding hedging activities, increasing allocations to alternatives and seeking exposure to new markets and regions. Such adjustments may help diversify portfolios, although their effectiveness will ultimately depend on how different investments behave during periods of market stress.

Operational Risks Move Up the Agenda

Operational challenges feature prominently in the survey. Business continuity risk has increased for 80 percent of respondents, while 73 percent report higher technology and cybersecurity risk. Half of those reporting an increase in technology and cyber risk describe it as dramatic.

People and process failures, including trade execution errors and weaknesses in internal controls, have become a greater concern for 75 percent of respondents.

Looking ahead, technology and cybersecurity remain the most frequently cited risks, followed by liquidity at 47 percent and credit at 46 percent. Concentration risk is identified by 37 percent of respondents, while 35 percent point to people and process failures.

The distinction between risks that have increased and those causing the greatest concern is notable. Although market risk has risen most widely, operational vulnerabilities appear to occupy a more prominent place in managers’ expectations for the coming year.

For investment firms, technology has become central to portfolio management, trading, reconciliation, reporting and regulatory compliance. Greater reliance on interconnected systems and external service providers can improve efficiency, but also creates additional dependencies that need to be managed.

“Many firms still rely on fragmented systems, manual reconciliations and delayed reporting processes that can create inefficiencies and increase the potential for errors during periods of market stress,” says Sturhahn.

Reputational and Competitive Pressures

The study also highlights risks beyond investment performance and day-to-day operations.

Reputational risk has increased for 69 percent of respondents, with 44 percent describing the increase as dramatic. The survey defines reputational risk as potential damage arising from factors such as negative media coverage, legal disputes or poor performance that leads to investor withdrawals. Meanwhile, 72 percent report higher competitive risk, including the possibility of losing market share because of weaker performance or higher fees.

ESG-related risk has also increased for 77 percent of respondents. The study defines this as the potential for losses arising from investments that fail to meet environmental, social or governance standards.

Taken together, the findings point to a challenging environment in which asset managers must address investment risks alongside growing operational, regulatory and commercial demands.

The research does not establish whether these risks have increased equally across different types of managers or geographic markets. Nevertheless, the breadth of reported increases suggests that risk management remains a central concern across the industry.

Operational Challenges in Focus at HedgeNordic Roundtable

Several of these themes were also discussed at HedgeNordic’s recent COO Roundtable, held on October 8 in cooperation with Clearwater Analytics and IG Prime in Copenhagen.

The discussion brought together representatives of Nordic investment firms and industry service providers to examine operational efficiency, financing and counterparty relationships, regulatory requirements, cybersecurity, data management and the growing use of artificial intelligence.

Participants explored both the opportunities presented by new technology and the practical challenges of implementing it, including data quality, oversight of external providers and the need to maintain effective operational controls.

HedgeNordic will publish a more detailed account of the roundtable discussion in the coming days.

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