Fund Management CEOs Bullish on Growth

Half of the chief executives of global investment companies expect revenues to grow by a more than a fifth over the next three years.

The 2006 Global Investment Management Survey by PricewaterhouseCoopers said 55 percent of global investment company chief executives surveyed expect revenue growth of 20 percent or more over that timeframe.

U.S. investment firms are less bullish, with only 35 percent expecting revenue growth of 20 percent while two-thirds forecast more modest growth of 5 percent to 19 percent over the next three years.

Increasing distribution of existing products in existing markets was cited as a top concern by 53 percent of firms in the U.S.

Improving resource development and talent retention ranked as a top concern of chief executives both in the U.S. and globally. U.S. firms were also more likely to use short-term incentives such as bonuses or long-term incentives such as shadow equity schemes to recruit, retain and motivate portfolio managers, while firms globally relied on base salary and equity ownership.

A recent Financial News poll of 42 heads of asset management, representing more than $8.8 trillion of funds globally, found that chief executives rated retaining talent as their biggest challenge and said performance-related bonuses, as well as guarantees of operational independence, were the most effective ways of retaining top performers.

The Financial News survey also found that eight out of 10 chief executives are interested in acquiring specialist fund management firms or open to acquisition ideas.

The PricewaterhouseCoopers survey of 81 investment management organizations, representing $9 trillion in assets under management, was conducted between March and April of this year.