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Friday, 6 March 2009

Shake-up in asset dealing

By Alvin Foo

A MAJOR shake-up of the asset management industry in the wake of the financial crisis is likely, with massive shifts in asset allocation and changes to who manages these funds.

Investors are also adopting a more sober and netural view of their investments with curtailed expectations amid the storm.

These points were made by speakers at the Institute of International Finance Asia Regional Economic Forum hosted by DBS Bank here on Thursday.

'The landscape of the industry will be changed quite dramatically,' said Mr Christof Kutscher, head of Asia Pacific for UBS Global Asset Management.

'We'll see huge shifts in asset allocation, a lot of shifts in selection of who's going to manage.'

The market turmoil of the last 18 months has resulted in a huge disparity in the performance of fund managers, he noted.

Mr Kutscher said this big variation in performance will lead to a substantial reallocation of investment mandates.

He added: 'Clients have moved to lower risk asset classes. One has to think hard on how to survive in an industry where revenues will be lower by 40-50 per cent. Advice is key.'

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