State Street Releases Vision Focus Report on Structural Change within Europe’s Investment Management Industry
September 23 2010 - 8:02AM
Business Wire
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.
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