Cyber risk top concern for 62% of asset managers

Sixty-two percent of asset managers name technology and cybersecurity as their greatest concern for the year ahead, more than double the 28% who cite market risk, according to a survey commissioned by Clearwater Analytics.

The Crowded Trade survey polled 250 senior executives at asset management firms across the US, Europe and Asia-Pacific between April and May 2026. Pureprofile ran the fieldwork; respondents covered equities, fixed income, multi-asset strategies, private markets, hedge funds and insurance assets. HedgeNordic reported the results on Oct. 9.

Technology and cyber risk rose for 73% of executives over the previous 12 months, and half of those reporting an increase called it dramatic. The 62% figure answers a question about the year ahead; the 73% describes the previous 12 months. Business continuity risk rose for 80%, and 75% report people and process failures becoming a greater concern. Those failures include trade execution errors and weak internal controls — the items an operational due diligence review tests when an allocator vets a manager.

In the same period, market risk exposure increased for 80%, credit risk for 77%, and liquidity and concentration risk each for 71%. Among those reporting increases, 51% called the credit rise dramatic, while 36% and 29% did so for liquidity and concentration, respectively. These are executives' assessments of their own risk exposure, not independently measured changes in portfolio risk.

"Market, credit, liquidity, and concentration risk are all rising at nearly every firm that responded," said Chris Sturhahn, Clearwater's head of product for asset management. "That's a harder problem than any one risk moving by itself."

According to Sturhahn, managers are responding by expanding hedging activity, increasing allocations to alternatives and seeking exposure to new markets and regions. The report says the effectiveness of those adjustments will depend on how the different investments behave during a period of market stress.

For allocators, the reallocation is the survey's most concrete diligence item: an alternatives sleeve added to dampen market risk carries its own liquidity, valuation and capacity terms.