Senior executives from the investment management industry feel confident enough about the future that they are expanding into new geographical locations, according to a survey taken at Investit’s bi-annual industry conference.
The conference, held on 28 January 2010, was attended by 60 delegates from 19 investment management firms with £3.5 trillion of assets under management, and six third party administrators with £25 trillion of assets under custody and management.
95% of respondents to the survey, conducted at each bi-annual Investit Intelligence Conference to take the industry’s pulse, expressed confidence about the year ahead. Furthermore 64% expected the outlook to improve significantly by the end of the year. This is in sharp contrast to early 2009, when 41% of participants had put their projects on hold and only 27% expected the picture to improve.
As confidence is returning, 88% of delegates stated that expanding into new regions is their top priority for the year ahead. In terms of where the industry is looking to expand, 56% of the participants ranked Asia Pacific as their number one destination, while the Middle East and North Africa region came second with 27% of the vote. North and South America followed with 9% and 7% respectively.
Peter Ellis, managing director at Investit, said, “The mindset has definitely shifted over the past 18 months and although there are significant issues regarding the economy, investment performance is not always in sync with economic conditions. We saw the same disconnect after the dot.com crisis in 2001 and 2002 when it was the reverse – the markets were in a bad state but the economy was growing. Expanding into new regions has been a priority over the past six years but it has moved to the top from the middle of the agenda because investors are now feeling more confident.”
As for other major areas of focus identified by respondents, UCITS (88%), data management (79%) and client reporting (77%) continue to feature prominently. The interest in UCITS is due to impending regulatory changes planned for July 2011, while data management continues to be important on the back of new products, changing legislation and an increasing requirement for timely and accurate information. Client reporting has also become more important due to regulatory and investor pressure for greater transparency.
Ellis believes that investment management firms will need to look at developing solutions in order to address these key areas. He said, “Data management and client reporting have been recurring themes at our industry conferences for the past three years. One of the questions to ask is whether firms are meeting those challenges in the most effective way and whether it is time to look at different approaches, especially in view of the fact that firms are now looking to expand their operations.”