Sat, Feb 13, 2016
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. Asia - Hedge fund manager Kyle Bass estimates China's foreign reserves below critical level[more]

    From Nasdaq.com: Investor Kyle Bass stepped up his attack on China's currency, arguing in an investor letter distributed Wednesday that the second-largest economy's foreign reserves are "already below a critical level." The comments mark the latest effort by hedge funds and other investors to raise

  2. Investing - Some hedge funds want to make subprime auto loans next big short, 11 hedge funds that are “all in” on the FANG stocks, Hedge funds short London luxury homes, Cynet raises $7 million from U.S. hedge fund[more]

    Some hedge funds want to make subprime auto loans next big short From Bloomberg.com: A group of hedge funds, convinced they have found the next Big Short, are looking to bet against bonds backed by subprime auto loans. Good luck finding a bank willing to do the trade. Money manage

  3. Investing - Hedge funds see selloff in European bank stocks as buying opportunity[more]

    From WSJ.com: The massive selloff in European bank stocks and bonds is overdone and presents a “phenomenal” buying opportunity, according to some of Europe’s top hedge-fund managers. Despite a 28% slump in European bank stocks this year, including a 38% fall in Deutsche Bank AG and a 34% drop in Soc

  4. Legal - Carlyle accused of fraud by ex-employee, Hedge funds win CDS breach of contract suit against Deutsche Bank, Hedge fund asks for OK on $27.5m Goldman CDO deal, SFO examines Barclays hedge fund profits[more]

    Carlyle accused of fraud by ex-employee From AI-CIO.com: A former portfolio manager claims he was fired for blowing the whistle on “crazy” and “irresponsible” investments. Carlyle Group has been sued by a former portfolio manager for one of its hedge funds, who accused the firm of “knowi

  5. Illiquid assets are all the rage for hedge funds[more]

    From Valuewalk.com: …Institutional investors are increasingly turning to illiquid assets and active management strategies to combat macroeconomic trends, anticipated market volatility and diverging monetary policy, according to a new survey by Blackrock. And this week, Bloomberg has reported that at