Finding the Right Balance: Priorities for EMEA Asset Owners

For institutional asset owners across Europe, the Middle East, and Africa (EMEA), 2025 has already proven to be a challenging and dynamic year. Facing a complex investment environment shaped by geopolitical uncertainty, market fluctuation and regulatory change, decision-makers have been tasked with reassessing strategic priorities to determine how long-term objectives can be achieved.

To better understand these priorities, Northern Trust released an asset owner peer study in 2025 that gathered insights from 180 senior leaders at institutional asset owners with assets ranging from US$1 billion to more than $500 billion. Of the organisations in EMEA that responded, 32% were from the United Kingdom, 10% from the Netherlands, 10% from Sweden, 10% from Norway, 8% from Saudi Arabia, 8% from United Arab Emirates, 8% from Switzerland, 8% from Denmark, and 5% from Germany.[1]

The results of the study paint a dynamic picture. Asset owners in the region have well-balanced portfolios and are looking to increase allocations to private market assets. This has led to a greater focus on liquidity, risk management, data and technology, all crucial for managing alternative investments. EMEA plan sponsors remain keenly focused on regulatory change and the data they need to comply with reporting requirements. When confronting the challenges they face, asset owners look to strategic partners to help them navigate both external and internal challenges through outsourced capability and technology.

Investment strategy: Alternatives on the rise, liquidity a focus

The study revealed that EMEA institutional asset owners maintain well-balanced portfolios with a 34% allocation to equity, 29% to fixed income, 15% to private market investments and 10% to absolute return and hedge fund diversifiers.

EMEA respondents also reported a robust allocation to cash at 12%. A few possible scenarios could lead to schemes holding on to cash. Organisations with larger alternative allocations might carry more cash to better manage their liquidity in anticipation of capital call activity. Others may be looking to improve their liquidity at a time when private equity exit activity is low, as it was in 2024. The study revealed that 83% of EMEA respondents currently invest in private markets, and 63% reported that liquidity has become more important to their investment strategy in the last 12 months.

EMEA asset owners’ biggest challenges: Navigating risk, regulatory environments and geopolitical instability

EMEA asset owners cited three important and challenging components of their strategy: navigating the regulatory environment as it continues to change (42% of respondents), being able to manage costs efficiently (38% of respondents), and ensuring they have timely, accurate, and appropriate data to be agile in their decision-making (37% of respondents).

As one of the more important considerations, regulatory change was mentioned frequently by EMEA respondents. For example, looming large is Dutch pension reform, which will create a shift from defined benefit (DB) pensions to (collective and individual) defined contribution (DC) pension schemes. The majority of the €1.5 trillion Dutch pension assets will transition between 1 January 2026 and 1 January 2028.

In the UK, pension reform has continued to drive to scheme consolidation to create “megafunds” in order to take advantage of better investment opportunities, fee structures and economies of scale. Also in the UK, as the DC market grows and consolidates, plan sponsors are looking for opportunities to increase allocations to private markets.

Those allocating 20% or more into private market investments are more likely to consider risk management complexities as a top three challenge. The organisations that allocate less to private market investments are more concerned about cost management.

When asked about the important metrics the organisation or institution currently uses to assess risk, EMEA asset owners ranked liquidity risk at the top. Risk management and budgeting was second and operational risk was third. And when asked what techniques asset owners use to meet their overall risk objectives, risk analysis, exposure management and risk budgeting were the top three choices.

Regarding external challenges, EMEA asset owners saw domestic political instability as much less of a concern than interest rates and overall geopolitical instability.

An emphasis on outsourcing and working with service providers

Asset owners are increasingly looking for streamlined governance and greater economies of scale, simplicity and oversight, which they believe can be accomplished with a tighter group of partners.

Respondents were asked which internal and external investment challenges they believed service providers could help them manage more effectively. At the top of the list for EMEA was industry research at 73%. The other areas that EMEA looked to service providers for help included data support (50%), investment analytics (50%) and investment due diligence (45%).

When asked which functions they have outsourced, the majority chose regulatory filings and trade execution as the functions they outsource most often (both 63%). These capabilities are crucial to help the front office function efficiently and help ensure that regulatory requirements are met.

The study showed that asset owners in the region were highly concerned about the accuracy and consistency of data, as well as their ability to integrate data across their applications. They are looking for service providers to offer enhanced data risk management and reporting capabilities. They also frequently looked to service providers for data warehouse solutions.

When considering external providers, EMEA asset owners globally selected client service and global expertise as their top priorities. Also important were financial strength and best-in-class technology.

Asset owners need help with technology

Looking ahead to the future, EMEA asset owners identified harnessing the power of AI as one of their biggest challenges.

When asked about the value of outsourcing, 42% said outsourced providers could help with technology implementation and target operating model design.

As technology and data models move more quickly, those who insource struggle to keep up, both from a cost and a resourcing perspective. Outsourced providers who specialise in technology solutions are better equipped to handle the rapidly changing face of today’s technological advancements.

Considering the promise of AI and automation and the expertise required to harness it, it is likely that more asset owners will look to outsourced providers to help them make sense of it.

For example, 78% of EMEA asset owners are adopting new technology, and 63% are increasing automation to make their operational procedures more efficient. These organisations will need expertise to effectively implement and take advantage of these new tools or rely on their providers to guide them through implementation and maintenance.

EMEA looks to thrive despite current headwinds and geopolitical instability

While EMEA asset owners continue to encounter geopolitical, market and regulatory shifts, they are well placed to take advantage of opportunities. Those who work with the right partners, embrace new technologies and remain agile will likely benefit the most.

For more information on the peer study, please visit A-Suite to view the published paper, Asset Owners in Focus.

[1] Due to rounding, not all figures will sum to 100%