GLOBAL - Half the future growth of the fund management industry will come from institutional investors, Bridgewell Securities predicts.
The stockbroker’s report entitled ‘Major Themes in Global Fund Management 2003’ claims growth in the fund management industry has been postponed, rather than cancelled, as funded pensions become more popular globally and “baby-boomers” reach their prime savings period.
The research shows that after three difficult years, the US$47trn global fund management industry is facing significant structural change arising from structural weaknesses including over-capacity, high fixed costs, poor management and uncompetitive products.
The report also predicts major growth in hedge fund strategies, not only because of the low correlation of assets, but the durability and repeatability of these investment strategies.
“The growing institutionalisation of the industry should reinforce both of these characteristics,” the report says.
Bridgewell fund management analyst, Nigel Russell, added that “superior performance” – whether derived from hedge funds, private equity or long only investment management – would be crucial to the success of the fund management sector.
He said: “Businesses that have been successful in the past may be found to be backward-looking – focused on a vast but dwindling asset base and unable, or unwilling to grasp new opportunities to prosper in a transparent, low-return environment.”
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
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