Morgan Stanley Investment Management reports growing adoption of the Total Portfolio Approach is intensifying a divide among general partners. Vikram Lokur, managing director and head of institutional distribution for Southeast Asia and Hong Kong, told PEI that managers providing a holistic approach will gain advantage in this shifting landscape.

The trend toward TPA adoption is prompting limited partners to become increasingly selective with their manager choices. This shift in allocation model requires GPs to expand their product offerings to better align with LP priorities, potentially creating a significant competitive disadvantage for firms unable to adapt to changing investor demands.

The bifurcation among GP firms will likely accelerate as LPs continue prioritizing comprehensive solutions. Firms that fail to develop broader service capabilities risk losing market share to competitors who can meet the evolving needs of institutional investors, with the most significant impact expected in mid-market segments.