Global fund managers face multi-asset skills shortage

LONDON Mon Jul 14, 2014 4:00am EDT

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LONDON (Reuters) - Global fund management firms are struggling with a skills shortage as the industry moves toward multi-asset investing in an attempt to improve returns, a study showed on Monday.

With stock markets struggling to match the stellar gains of 2013, bond markets looking overpriced and emerging markets offering only patchy value, many investors are looking for flexibility in their investments.

That means more money going into funds that can invest across the range of asset classes instead of just one, the study by State Street and research group FT Remark found.

It surveyed 300 senior executives at asset management firms across Europe, the Asia Pacific, and North America in April and May, and found more than two-thirds aimed to focus on expanding their multi-asset offerings over the next three years.

At the same time, 64 percent acknowledged that a "capability gap" was causing them to struggle to adapt and compete in the new investment landscape.

"There is recognition that clients are driving the needs of asset managers to move in a certain direction but the industry itself needs to evolve to be able to deliver that kind of product set," said Andrew Wilson, Head of Asset Manager Solutions UK at State Street.

An overhaul of both the products on offer and the way they are distributed, an improvement in the technology underpinning the funds and the hiring of specialists to try and plug the gap were all steps to take, said Joerg Ambrosius, State Street's Head of Asset Manager Solutions in Europe.

As well as fixing their operations, some may opt to buy a competitor to try to improve their market reach, the report said, with a quarter of those surveyed saying they saw significant deal opportunities in the next 12 months.

Ambrosius said there would be winners and losers in the evolving asset management sector and that some players would even disappear.

(Editing by Simon Jessop and John Stonestreet)

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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