Change within Investment Management

Date: June 2009
Author: Catherine Doherty
Price: £3000 to non-members of the Investit Intelligence Member service


The events of the past two years have fundamentally altered the world of financial services and have brought back a huge emphasis on the privilege and duty involved in managing other people’s money. Whether it is a crossroads or just a bend in the road for fund managers, what is certain is that clients are standing bewildered on a traffic island in a fast-moving highway saying “who can I trust next”.

This report was written in the second quarter of 2009 and is mainly based on a series of interviews conducted with chief executive officers of investment management firms. The interviews were conversational and discussed the activities which had taken place in financial markets over the past two years, and their impact on investment management firms, clients and products.

The aim of the research was to gather and present a wide variety of views from different types of firms so our interviews included representatives from long only managers and hedge managers, from some of the largest bank and life firms to in-house schemes. We also talked to a range of managers in the Australasia region and we have included further market intelligence gathered as we established our Middle East office, and from our wide-ranging consultancy work.

The report analyses the impacts in three categories – impacts on the business itself, impacts on specific products and finally the wider-ranging impacts.

Table of contents

Management Summary 1
1 Introduction 3
1.1 Participants 4
2 Then and Now 5
2.1 ‘An unprecedented period of change’ 6
2.2 Received wisdom 7
2.3 The defining moment? 8
2.4 A bend in the road or a crossroads? 11
2.5 U/V/W vs ladles, bathtubs or porpoises 13
3 Business Impacts 15
3.1 Clients and Intermediaries 16
3.2 Liquidity 19
3.3 Transparency 22
3.4 Fees 24
4 Product Impacts 27
4.1 Absolute return 28
4.2 Index products 29
4.3 Cash management 30
4.4 Fund-of-funds 31
4.5 Asset allocation 33
4.6 Less complexity? 35
4.7 Back to the future? 37
5 Macro Impacts 39
5.1 Regulatory changes 40
5.2 Choose your parent 42
5.3 Size, brands and consolidation 45
5.4 Client-centricity 47
5.5 Changes to the competition 48
5.6 Implications for operations 50
6 Next Steps 53
6.1 Investigation and preparation 54
6.2 Single initiatives 56
6.3 External initiatives 59
6.4 Cross-business initiatives 60
6.5 Actions/initiatives lists 62
7 Index 65

 


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