The Future State of the Investment Profession study released today by CFA Institute describes an industry at an existential crossroads. It warns that investment industry leaders who fail to transform their business models may jeopardize the future of their firms.

A record number of investors (net 34%) find equities to be overvalued, the most in 17 years; the US is identified as the most overvalued region (net 81%), while EM equities (net 44%) and Eurozone equities (net 23%) are seen as undervalued

Hedge fund liquidations increased in the fourth quarter even as the industry surpassed the $3 trillion milestone, bringing the number of closed funds for 2016 to the highest level since 2008. Hedge fund liquidations increased to 275 in 4Q, rising from 252 in the prior quarter...

The private debt industry has continued to grow in recent years, and as of the end of H1 2016 reached a record $595bn in assets under management. Launched today, the 2017 Preqin Global Private Debt Report finds that both the level of capital available to fund managers (‘dry powder') and the total value of unrealized investments increased, driving AUM up by $40bn from the end of 2015.

Key strategies include growing use of private investments, illiquid assets, increased exposure to alternatives and greater reliance on risk budgeting and diversification...