UK - Medium-sized fund managers cannot meet the growing demand for specialist investment and face being squeezed out of the market, Aon Consulting predicts.
The consultant believes a sharp contraction in the fund management market – similar to the Big Bang in stockbroking in 1986 – will lead to the sale of many fund managers, which are unable to compete with better-resourced large managers and smaller niche managers.
Aon investment principle Chris Erwin said: “We are finding that the managers that will survive are either the smaller managers – who are really quite specialist – or alternatively the bigger fund managers that have been developing a range of products with differing risk levels.
“Medium-sized firms can’t afford the staff to do this.”
He added: “There are a very large number of fund managers up for sale, but there are virtually no takers at the moment.”
Fidelity executive director Peter Hunt said consolidation within the industry was “inevitable”, given the poor state of the markets.
Rothschild Asset Management and Jupiter Asset Management have been put up for sale – though Jupiter was withdrawn because its parent, Germany’s Commerzbank, did not receive what it believed to be a suitable offer.
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