June 2014 - Gong Kenya

Sarah Caddy

Are you bullish about the future of the asset management industry? Recent reports that global profitability levels have recovered post-crisis, and that worldwide assets under management (AuM) levels are on track to exceed $100 trillion by 2020 (from $63.9 trillion today) certainly paint a rosy picture.

We’re not to rest on our laurels though. By all accounts, the journey over the next six years to that elusive £100 trillion figure will not be an easy one. Costs are on the rise in response to ever-increasing regulation and data management, broadening distribution platforms, and the fact that any fees earned are under closer and closer scrutiny by investors. What’s more, according to Chris Flood and Deloitte in today’s FT, only a very small number of funds will control that growing asset base (in the UK at least).

So what’s the key to beat the competition, and to secure the very best talent? A brave new world, PwC’s latest report on the asset management industry, certainly doesn’t hide its authors’ views. It preaches transparency, to build consumer trust (after all, post-RDR, a focus on retail investors is getting too expensive, and consumers will be self-directing services in no time). But most of all, it directs asset managers to ‘Stay close to the decision makers, and to the media’ (page 22 of the report), claiming:

“The industry by 2020 will increasingly focus on articulating its purpose, but on broader messaging and PR campaigns to ensure the community at large ‘gets us’ and views the industry as part of the solution rather than part of the problem.”

Having a dedicated social media strategy is a core part of this engagement. The question is whether asset managers are prepared to seek the requisite professional advice to stay ahead of the competition.

The scenario played out in the opening of the PwC report is a compelling one. I’m sure it’s not long before my friends and I check our retirement funds and choose assets at the same time as logging on to facebook, or reviewing the latest selection of potential dates for the evening. Dear asset management industry – I’m game for change, if you are. Just don’t let rising operational costs put you off spending in those areas that might really make a difference to whether you see your share of the ever-expanding pot of gold.

Tessa Wilson

The Spring bank holiday weekend meant a trip to Oxford to staff the 2014 Oxford Africa Conference. The 2-day event titled African Transformations was organised by Oxford’s two leading student-run Africa organisations: the Oxford Africa Society and the Oxford Business Network for Africa.

There was lots of interesting, direct and honest content and working with Gong’s financial services clients meant my ears pricked up for the ‘Investments in Actions: Private Equity Cases’ session with a discussion between members of CDC and The Abraaj Group, moderated by Private Equity Africa, Managing Editor, Gail Mwamba

There was a strong focus on the progress of African PE over the last decade, with discussion bouncing between the mass of opportunity and the overestimated risks. Yet the panel members were clear that one of the key constraints within African PE is finding superior talent, with David Easton, CDC, citing an important decision-making factor in his firm’s latest investment in the DRC as being its “good management”.

Talent, both at GP and portfolio company level, can be a major limiting factor for PE in Africa. Often not all the skills needed – financial acumen, management experience, African background and operational track record – can be found in one individual.

With such a positive view on other, more ‘obvious’ risks, both political and economic, it is the difficulty in pinning down elusive talent which is often underestimated.

Monthly Archives: June 2014

Global Asset Management: Game for change?

2014 Oxford Africa Conference 23-24 May 2014

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