June 2009

NEWSLETTER: five futures, and one of them's a girl

Last week, we learnt that BlackRock had acquired Barclays Global Investors to create an asset management mega-giant with assets under management of $2.7 trillion. At the same time, writing in Fidelity’s weekly outlook Tom Stevenson suggested it was time for us to cheer up and abandon our widow’s weeds... “After the best part of two years, might this not be the time to stop mourning the loss of the last bull market and decide it’s time to focus on the potential of the next?” he said.

And against this backdrop of change and qualified optimism, there appeared a raft of reports and analyses addressing the scary topic of What The Future Holds.

First up is a study by Create entitled Future of Investment: The Next Move. Create’s preliminary findings show that 35% of asset managers believe there will be another systemic crisis over the next decade. To look on the bright side, I suppose that means 65% of asset managers don’t think there will be another systemic crisis.

Meanwhile, a new study from Alpha Financial Markets Consulting Ltd offers five possible futures for the industry each named after the outlooks given on a barometer. The ‘Five Futures’ are syntheses of interview with 33 leading industry participants conducted during March and April 2009 “to collect unprompted predictions of what would happen in European asset management over the next 12-18 months”.

At one end of the scale is ‘stormy’. “There are many who see everything changing around them, and the pressing need for them to react with significant changes in their own businesses,” says Alpha FMC. At the other, ‘very dry’. “There are some who see little change impacting them and little requirement for them to change their own businesses,” the firm notes.

According to the consultancy firm, those with significant captive distribution tend to at the ‘stormy’ end of the scale, while predominantly third-party managers, tend more towards ‘very dry’. Overall, those interviewed predict a future that includes the end of open architecture, new buyer selection criteria, a shift away from re-balancing to de-risking, a shake-out of the boutiques, and the assertion of new business management disciplines (whatever that means).

Alpha FMC also predicts a new gender direction for the industry. “Many of the new ‘softer’ techniques and practices appropriate to the new world can collectively be described as the ‘feminisation’ of the industry,” the firms says.

How lovely!

So if your sales brochures aren’t yet girly pink they should be. You read it here first.

Fiona Rintoul, editorial director
©2009 funds europe

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