Investment Managers Bullish On Revenues, Hiring

Jul 9 2013 | 8:47am ET

KPMG surveyed 100 senior executives representing hedge funds, mutual funds, private equity funds and other types of funds to gauge their outlook for the near-term future and found it to be generally bright.

A full 81% of the executives polled for KPMG's 2013 Investment Management Business Outlook Survey saw their revenues rise last year and 84% expect their revenues to rise again in 2013. Those figures are up from 60% and 69%, respectively, in the 2012 survey.

KPMG found executives bullish about hiring—46% hired last year and 48% expect more hiring in 2013. They are also poised to increase spending—45% on expanding geographically, 39% on information technology.

The importance of data analytics continues to rise, especially in the areas of risk management, regulatory, competitive and customer intelligence.  Nearly 40% of the executives polled said their company has “high analytics literacy,” up from 27% last year, and 23% say their company is “rapidly” moving toward becoming an enterprise with high analytical literacy.

As they looked for new areas of growth for their businesses, 54% planned to engage in some form of M&A activity this year.

When asked to identify the most promising region for asset growth, 57% named the U.S., while 28% identified the Asia and the Pacific region.

On the flip side, 57% of the investment management executives polled named political and regulatory uncertainty as the biggest threat to their business models. That said, 38% of those polled are “very prepared” to manage the changes brought on by new regulations, up from 28% in last year's survey.

The survey also revealed that 49% of the executives believe regulatory and legislative pressures remain the most significant growth barrier for their business over the next year, which is down from 57% of those polled last year.

“While economic, political and regulatory uncertainty remain issues for asset managers, they appear more focused on investing in their infrastructure, geographic expansion and growing their businesses,” said KPMG's Jim Suglia, national advisory leader, investment management.

 


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