Examines the Drive Toward Greater Scale and Efficiency Amid
Changing Investor Needs
BOSTON--(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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CORP-0213
Source: State Street Corporation
Contact:
State Street Corporation
Marie McGehee, +1-617-664-1898