1 Dec 2011
Fully 73% of investment managers are forecasting a substantial increase in investor interest towards hedge fund compliant UCITS funds over the next year, according to a survey by SEI. The survey also showed that a majority of investment managers, 57%, are optimistic about their firm’s prospects over the next three years.
When identifying where they see opportunities, respondents pinpointed institutional assets as the biggest contributor to future growth, with only 11% believing organic growth would be a key factor. When focusing more specifically on the investor types or channels that promise the greatest growth, investment managers cited pension plans.
The poll, conducted at SEI’s annual CFO forum for alternative investment managers in London, found that positive market prospects were the main reason behind this optimism. However, the remaining 43% were concerned about their firm’s prospects, marking a substantial increase from the 12% who expressed concern in a similar poll conducted in April.
Of those with a pessimistic outlook, most cited negative market prospects, weak branding, and uncompetitive performance as prominent concerns. Additionally, 44% of participants revealed that economic uncertainty will be the most significant challenge facing the industry in the near future.
The poll also revealed regulatory climate as a concern, with 67% listing regulation as a critical consideration in domicile selection. Respondents argued that satisfying regulatory requirements is their firm’s greatest operational challenge, even more so than satisfying investor expectations.
However, managers still have their focus on investors, especially given that 55% indicated investor confidence is worse or has not improved since the aftermath of the financial crisis. Conversations at the forum touched on the heightened due diligence managers are facing, as well as the increased transparency investors are looking for when it comes to understanding where and how returns are generated.
The poll was completed by CFOs, COOs, and senior executives across management operations, distribution, and investment professions.
When identifying where they see opportunities, respondents pinpointed institutional assets as the biggest contributor to future growth, with only 11% believing organic growth would be a key factor. When focusing more specifically on the investor types or channels that promise the greatest growth, investment managers cited pension plans.
The poll, conducted at SEI’s annual CFO forum for alternative investment managers in London, found that positive market prospects were the main reason behind this optimism. However, the remaining 43% were concerned about their firm’s prospects, marking a substantial increase from the 12% who expressed concern in a similar poll conducted in April.
Of those with a pessimistic outlook, most cited negative market prospects, weak branding, and uncompetitive performance as prominent concerns. Additionally, 44% of participants revealed that economic uncertainty will be the most significant challenge facing the industry in the near future.
The poll also revealed regulatory climate as a concern, with 67% listing regulation as a critical consideration in domicile selection. Respondents argued that satisfying regulatory requirements is their firm’s greatest operational challenge, even more so than satisfying investor expectations.
However, managers still have their focus on investors, especially given that 55% indicated investor confidence is worse or has not improved since the aftermath of the financial crisis. Conversations at the forum touched on the heightened due diligence managers are facing, as well as the increased transparency investors are looking for when it comes to understanding where and how returns are generated.
“Optimism is understandably tenuous at present since investment managers are facing an empowered investor base, an avalanche of regulations, and an uncertain economic climate,” said Phil Masterson, Managing Director for SEI’s Investment Manager Services division. “However, it’s reassuring to see that firms continue to focus on the future and work on identifying growth opportunities. It is clear that managers are under pressure and need help from their partners in order to focus on their core business and ultimately thrive in the uncertain economic climate and unrelenting regulatory environment.”
The poll was completed by CFOs, COOs, and senior executives across management operations, distribution, and investment professions.
