Crystal gazers see polarisation in the industry
More and more consultants are spending time gazing into the crystal ball and polling asset managers to work out where the industry is heading.
The latest prediction to drop into my mailbox comes from Hymans Robertson, an investment consultant that believes polarisation is going to increase this year, according to its annual survey of UK fund managers. That means bigger firms will get larger, while smaller ones will reduce in numbers.
Musical chairs: Survey shows plans to both fire and hire asset managers
One way or another asset managers are in for a bumpy ride this year as many are likely to be replaced.
At least that’s the scenario according to Mellon Transition Management, part of BNY Mellon Asset Management, which says a record number of global pension funds and endowments are planning to change asset managers as they try to reduce risk.
Just in case anyone is wondering why BlackRock is trying to snap up Barclays Global Investors, a small reminder dropped into my mailbox today with a preview of research on the exchange traded fund industry, albeit delivered by BGI.
It quotes data from mutual fund consultant Strategic Insight to the effect that net sales of mutual funds were minus $6bn in the first three months of the year compared to net sales of $7.7bn for ETFs, one good reason why the US money manager might be keen to get hold of BGI’s business.
Europe’s battered fund industry is beginning to look a little less shaky as fund flows pick up in the first three months of the year. This breaks a long run of outflows after the financial crisis broke mid 2007 and then investors hit the panic button following Lehman’s collapse last autumn.
Net inflows reached €22bn as investors moved into money market funds and some of the outpourings from equity and bond funds were staunched, says quarterly research from Efama, the European fund body.
It’s time the asset management industry held boards to account for not listening to what fund managers are saying over corporate governance issues.
White knuckle ride ahead
Asset managers should grit their teeth for a painful year ahead. Banks and hedge funds may have been taken to the extremes of their pain thresholds already but it’s yet to happen to active managers.
The FTSE 100 entered an official bull market last week with a rise of more than 20 per cent from its lows in March, and global equities surged on hopes the worst of the recession is over.
But here’s the curious thing. The majority of independent financial advisers say the green shoots of recovery are nothing more than hot air and recent stock market gains are simply a bear market rally. And so do most of the private investors they advise, according to a survey by 1st- The Exchange, a technology provider for financial services firms.
tweeting off limits
In an age of blogs, twitters, professional and social networking I’ve just learned that some organisations are clipping their employees wings by forbidding them to access such sites from company computers.
At least that’s what happens in the world of some big investment banks.
revolving doors spinning faster
Many investors react to poor performance from their investment managers with one thought – the firing line.
But that is not always the the way to go, especially in credit crunch conditions where lack of liquidity, forced de-leveraging and government intervention have made it difficult for investment managers to move fast enough to avoid losses, say consultants Watson Wyatt.
Financial institutions are in the dog house again. This time the sector is gaining attention for being the worst performer to manage its environmental, social and governance risks in 2008.