Recent research and white papers

FUTURE OF INVESTMENT: THE NEXT MOVE?

Two of the four worst bear markets of the last 100 years ravaged the global asset management industry over a span of seven years in this decade. Indiscriminately, like a tsunami, the latest has wiped out some $15trn in asset values, causing havoc in every asset class, every market, every geography and every client segment: 15 years of capital gains were wiped out in 15 months. With the worst of this collateral damage now seemingly over, it is time for a stock-take and some scenario work. This study explores how the market dynamics of the fund business will change and how its business models will reshape.

‘Future of Investment: the next move?’, CREATE-Research 2009
www.create-research.co.uk/pubRes/prTxt.html#futureofinv
CREATE-Research, 43 pages, June 2009

OPPORTUNITIES IN ADVERSITY: ASSET MANAGEMENT SURVEY SNAPSHOT

The asset management industry is facing unprecedented challenges in the wake of the deep and prolonged global financial crisis and the accompanying credit crunch. Investment losses, widespread redemptions and damage to the industry’s reputation have combined with the looming threat of significant regulatory changes to pressure almost all industry participants. Asset management firms are now challenged to reassess their risk management strategies and to manage costs in new and innovative ways.

‘Opportunities in adversity: Asset management survey snapshot’, Ernst & Young 2009
www.ey.com/Publication/vwLUAssets/Opportunities_in_adversity:_Asset_management
_survey_snapshot/$FILE/OIA_Asset%20mgmt%20survey%20snapshot.pdf
Ernst & Young, 8 pages, July 2009

TRANSVERSING THE ROCKY ROAD OUT OF THE GLOBAL FINANCIAL RECESSION: STOP WAITING FOR THE TIP!

Traversing the rocky road to a sustainable economic recovery will require collaboration between governments, regulators, technology vendors, and most importantly, financial services institutions (FSIs) on a few bold steps. This TowerGroup Research Note analyses the strategic business framework and proposes steps that each of these stakeholders must take in helping the global financial services industry recover from its long and obscure night of crisis and recession.

‘Transversing the Rocky Road Out of the Global Financial Recession: Stop Waiting for the Tip!’, TowerGroup 2009
www.towergroup.com
TowerGroup, 10 pages, October 2009

RENEWING THE PROMISE: TIME TO MEND RELATIONSHIPS IN INVESTMENT MANAGEMENT

‘Renewing the promise: Time to mend relationships in investment management’ was produced by KPMG with research and support from Datamonitor. This report draws on the findings of a global survey of 288 respondents representing the investment management industry and investors as well as in-depth interviews with senior executives working across the industry.

‘Renewing the promise: Time to mend relationships in investment management’, KPMG 2009
www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Pages/Renewing-the-promise.aspx

MAKING SENSE OF THE NUMBERS: ANALYSTS’ PERSPECTIVES ON CURRENT AND FUTURE REPORTING IN THE INSURANCE INDUSTRY

Interviews with more than 40 investment professionals revealed widespread dissatisfaction with the current state of financial reporting. Many participants, especially life insurance analysts using IFRS, would like the IASB to move to a revised reporting framework as quickly as possible. While recognising the difficulties of developing solutions for such a diverse and complex industry, many would encourage standard setters to put pragmatism before theoretical precision.

‘Making sense of the numbers: Analysts’ perspectives on current and future reporting in the insurance industry’, PwC 2009
www.pwc.com/gx/en/insurance/IFRS/publications/analyst-reporting-perspectives.jhtml
PricewaterhouseCoopers, 16 pages, November 2009

THE FUTURE OF OTC DERIVATIVES: FIGHTING THROUGH FIVE KEY CHALLENGES

Firms that want to play in OTC derivatives will have to fund projects to implement the automation and process controls demanded by regulators and investors. In this report, TowerGroup encourages OTC derivatives technology teams to focus on front-to-back automation so as to reduce risk, improve operational efficiency and generate better valuations. To thrive in tomorrow’s new paradigm, institutions must address electronic trading of OTC derivatives, cross-asset-class trading and the real-time needs of counterparties and regulators.

‘The Future of OTC Derivatives: Fighting Through Five Key Challenges’
www.towergroup.com
TowerGroup, 9 pages, June 2009

IFRS FUND SURVEY 2010

In the current economy, the importance of financial reporting has been thrown into the spotlight. There has been a profound impact on the asset management industry and, in particular, hedge funds received considerable criticism. This survey explores the current application of International Financial Reporting Standards (IFRS) by investment funds across Europe.
‘IFRS fund survey 2010’

www.ey.com/GL/en/Industries/Asset-Management/IFRS-fund-survey-2010-introduction
Ernst & Young, 52 pages, January 2010

DELOITTE REVIEW – MONEY AND BORDERS: CROSS-BORDER INVESTMENTS IN A CHANGING GLOBAL MARKETPLACE

As conditions improve after the recession, it’s widely expected that government’s role in economies around the world will diminish. Firms that received government aid will buy back shares and pay off loans, stimulus spending will wind down, and protectionist impulses will recede. But is that the future?

‘Money and Borders: Cross-Border Investments In A Changing Global Marketplace’, Deloitte Review
www.deloitte.com/assets/DcomUnitedStates/Local%20Assets/Documents/Deloitte%20Review/US_deloittereview_Money_and_Borders_Jan10.pdf
Deloitte, 15 pages, January 2010

FRONTIERS IN FINANCE – A NEW PICTURE

As the financial services industry moves into recovery, it is still facing many challenges and opportunities resulting from the economic crisis. Clarity on what the true picture will be is important to understanding how the industry will move forward. With a renewed focus on efficient capital allocation, risk management, transforming business models and cost optimisation, the industry is working towards reaching a ‘new normal’.

‘Frontiers in Finance – a new picture’, KPMG
www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Frontiers-in-Finance/Pages/FiF-a-new-picture.aspx
KPMG, 48 pages, December 2009

TOP 10 CHALLENGES FOR INVESTMENT BANKS 2010

The global asset management business has had a wild ride in 2008 and 2009 with mutual fund assets and hedge fund assets declining precipitously. Although asset levels have rebounded smartly from their lows of March 2009 and the profit forecasts for 2010 look encouraging, investment firms will not forget the experience of the last two years. If 2009 was analogous to the dark ages for investment management firms, then 2010 will be the renaissance. This TowerGroup Research Note discusses the 10 most important business drivers and the strategic responses, and technology priorities spurred by them that asset managers will focus on in 2010.

‘2010 Top Ten Business Drivers, Strategic Responses and IT initiatives in Investment Management’, Tower Group
www.towergroup.com
Tower Group, 10 pages, December 2009

2010 TRENDS TO WATCH: FINANCIAL MARKETS TECHNOLOGY – OPPORTUNITIES IN THE RECOVERY

One year on from the financial crisis, the phoenix of the financial markets sector has emerged from the flames. With the sector renewed in capital strength and risk discipline, 2010 looks set to see a focus on opportunities rather than fire-fighting and survival. However, the crisis has not only changed the institutions themselves; it has also changed the landscape in which they operate and 2010 is set to be a period of uncharted territory for the industry. This brief maps out the likely evolution of the sector, following the key forces that will shape the market and drive business strategy.

‘2010 Trends to Watch: Financial Markets Technology – Opportunities in the Recovery’, Datamonitor
www.datamonitor.com
Datamonitor, 18 pages, December 2009

TOP 10 TRENDS IN CAPITAL MARKETS FOR 2010

A new report from Aite Group, LLC provides insight into 2010's top 10 key industry trends for asset managers, retail brokerage firms, exchanges, regulators and technologists in the capital markets. Aite Group sees the year ahead as one in which on-hold advances can finally move forward, while regulatory changes begin to reshape the financial services industry. The report is based largely on Aite Group's assessment of the past year's industry achievements and failures, as well as feedback from vendors and financial institutions

‘Top 10 Trends in Capital Markets for 2010’, Aite Group report
www.aitegroup.com/reports/201001191.php

RETHINKING BUSINESS OPERATING MODELS IN INSURANCE: THE RIGHT COMBINATION

Over the past two years, many financial services institutions have been working towards one goal – survival. Like many others, insurers have come under great pressure the financial crisis. Compared to their banking counterparts, most insurers have come through in good shape. But ‘business as usual’ is unlikely in the foreseeable future.

‘Rethinking business operating models in insurance: The right combination’, Deloitte
www.deloitte.com/view/en_GX/global/industries/financial-services/ec90a3ef7be16210VgnVCM100000ba42f00aRCRD.htm
Deloitte, January 2010

EUROPEAN INSURANCE OUTLOOK 2010

Insurers have fared better than the banks during the recent financial crisis but have still seen premiums drop by 6% for 2008 with no improvement in 2009. The authors of this article have identified seven post-crisis risks and opportunities for insurers in 2010. Among the risks and opportunities there are challenges like Rebuilding capital, developing a holistic approach to risk management, preparing for Solvency II implementation and handling an increasing complexity in a changing regulatory environment.

‘European insurance outlook 2010’, Ernst & Young
www.ey.com/GL/en/Industries/Insurance
Ernst & Young, 8 pages, January 2010

New reports published and information which could be relevant for listing can be submitted for review to: Editorial Assistant Mette Trier, mette.trier@simcorp.com.