UK - Fund managers are under pressure to restructure to meet increased competition and become more cost-efficient, a new survey shows.
The study – the latest in a series by the Confederation of British Industry and accounting giant PricewaterhouseCoopers – found that 59% of fund managers had shed jobs and cut costs.
But despite these efforts, profitability has declined for the third quarter in a row.
PwC global head of investment management Simon Jeffreys said the majority of managers expected more competition from Europe for business and the increased pressure to remain competitive was resulting in cuts internally.
Jeffreys said fund managers feared that they would have to make “further expense cuts” in response to extra competition from abroad and increased pressure on margins from falling equities.
The survey adds: “The desire to invest for greater efficiency has fallen as fund managers see cost reduction as the only route to improved profitability.”
But Scottish Widows Investment Partnership head of institutional division Chris Walker dismissed claims of increased competition from abroad. He stressed that SWIP had not seen any evidence of its European peers making inroads into the UK domestic market.
Walker said: “UK clients are much more supportive of local fund managers and it would only be in certain niche areas that there might be advantages to using European firms.
“Those certain niche areas relate to the pan-European field and pan-European smaller companies that are UK domiciled.”
Securities traders are also feeling less optimistic about their business situation, according to the report, with business levels remaining below normal.
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