Fri, Jul 25, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

State Street report: The changing shape of European investment management

Thursday, September 23, 2010
Opalesque Industry Update - State Street Corporation today released its latest Vision Focus report on trends within the European investment management sector. Entitled “The Changing Shape of European Investment Management,” the report examines the structural changes that are defining the future model for the industry.

For Europe’s asset managers, the financial crisis and an evolving regulatory environment have reinforced cost pressures that have been building in recent years, creating a need to achieve scale and efficiencies through a focus on core competencies. Already, a wave of consolidation has begun that is likely to continue while asset managers embrace new ways to reengineer their businesses amid changing investor needs.

“Over the next five years, the pursuit of scale through consolidation by asset managers is set to be a defining trend, with the potential to significantly enhance the efficiency of the industry,” said Stephen Smit, executive vice president and head of State Street’s Global Services business in the United Kingdom, the Middle East and Africa. “Asset managers are rigorously reviewing their operational models, and we are seeing an increased trend toward outsourcing of investment operations. And with the forthcoming UCITS IV Directive, managers are also exploring the potential to further streamline fund ranges and reduce costs.”

The paper explores regulatory change as another key factor for the industry, assisting the efficiency drive and intensifying the cost pressures that are forcing consolidation. Post-crisis, investors are increasingly adopting the ‘barbell’ approach that mixes low-cost passive exposure with alpha strategies. Over the next five years, large asset management firms are set to emerge with low-cost, scalable business models, while others will focus on building stables of boutique managers.

“Asset managers must develop businesses that can meet investors’ changing needs,” said Mike Karpik, senior managing director and head of Investments and Fund Products for State Street Global Advisors in Europe, the Middle East and Africa. “Success will come to those firms that can offer investors clear, relevant and compelling propositions. Above all, asset managers will need a sharp focus on what they do best, underpinned by a lean and efficient operating structure.”

State Street’s Vision Series addresses key trends and developments impacting the financial services industry. Previous reports have focused on pensions, UCITS IV, exchange-traded funds and sovereign wealth funds. To download a copy of this Vision Focus report or others in State Street’s Vision series of in-depth reports, please visit www.statestreet.com/vision.

(press release)

State Street Corporation is one of the world’s leading providers of financial services to institutional investors, including investment servicing, investment management, and investment research and trading. With $19 trillion in assets under custody and administration and $1.8 trillion in assets under management at June 30, 2010, State Street operates in 25 countries and more than 100 geographic markets worldwide. For more information, visit State Street at www.statestreet.com.

- FG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Events – AIMA Australian Hedge Fund Forum, Sept. 16, Sydney[more]

    AIMA Australia invite you to join us at our annual Hedge Fund Forum on Tuesday 16th September 2014 at the Sofitel Sydney Wentworth. The AIMA Australian Hedge Fund Forum is a non-profit hedge fund conference organised by the industry for the industry, featuring quality Australian and internation

  2. Opalesque Roundtable: Success in hedge fund marketing not linked to performance, but investor appetite[more]

    Komfie Manalo, Opalesque Asia: Success in marketing a fund is not linked to the performance, but to investor appetite, to the way you can market the fund, and to how much time you can spend to raise assets, said Antoine Rolland, the CEO of incubator and seeding firm

  3. Opalesque Exclusive: Loeb, Grantham cite growing economic concerns in letters[more]

    Bailey McCann, Opalesque New York: Hedge fund manager Daniel Loeb, head of Third Point, and Jeremy Grantham of Grantham, Mayo, Van Otterloo & Co. have both released their quarterly investor letters today. While news is positive on some fronts, and both men see pockets of opportunity, they also h

  4. Investing – Hedge funds expect Netflix earnings to catapult forward, Third Point's Loeb takes stakes in Fibra Uno, YPF, Royal DSM, Lake Capital in talks to back Engine Group[more]

    Hedge funds expect Netflix earnings to catapult forward From Investing.com: Netflix has made major strides forward in 2014 despite ongoing battles with the FCC and cable companies over the issue of net neutrality. The FCC has now received over 500,000 comments from the public on its pend

  5. Opalesque Roundtable: European family offices struggle to retain their investments in offshore hedge funds[more]

    Komfie Manalo, Opalesque Asia: The European Union’s Alternative Investment Fund Managers Directive (AIFMD) will constrain investment opportunities amidst concern a number of U.S. fund managers will stop marketing their products in the European Union under the new rule, said Valentin Bohländer fro