State Street Releases Vision Focus Report on Structural Change within Europe’s Investment Management Industry

State Street Corporation (NYSE: STT), one of the world’s leading providers of financial services to institutional investors, 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.

About State Street

State Street Corporation (NYSE: STT) 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.

The views expressed are the views of State Street and are subject to change based on market and other conditions. The opinions expressed may differ from those with different investment philosophies. The information we provide does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. We encourage you to consult your tax or financial advisor. All material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy of, nor liability for, decisions based on such information. Past performance is no guarantee of future results. This communication is directed at Professional Clients (this includes Eligible Counterparties as defined by the Financial Services Authority) who are deemed both Knowledgeable and Experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description (including Retail Clients) should not rely on this communication. The information contained within this marketing communication has not been prepared in accordance with the legal requirements of Investment Research. As such this document is not subject to any prohibition on dealing ahead of the dissemination of Investment Research.

CORP-0213

State Street (NYSE:STT)
Historical Stock Chart
From May 2024 to Jun 2024