AFG chairman outlines asset management industry’s future role

In increasingly difficult markets, new asset management techniques must not be reserved for the “rich and big guys”, according to AFG Chairman Paul-Henri de la Porte du Theil.

A newsletter of the Association Francaise de la Gestion Financiere (AFG) quoted de la Porte du Theil, speaking at a recent conference in London, as saying the asset management industry has a real role to play in society, as long as it can prove it adds value.

“The industry plays at least two complementary and equally important roles in the efficient functioning of the social and economic system, in France, in Europe (including the UK!), in the United States and increasingly all over the world,” he said.

“First, we are a buy-side industry. Our “raison d’être” is to help our clients, the end investors, to manage their investments. This is true for institutional investors as well as for retail investors. The needs of retail investors are changing and growing as the financing of retirement and long-term care becomes more and more important for them. Institutional investors are taking this into account.”

The second reason to be optimistic, he said, is that is of the asset management industry in the financing of the “real economy” is set to grow significantly, particularly in Continental Europe.

“Bank lending will see its proportional share decrease, thanks to the deleveraging process on the demand side and to the growing requirements of the Basel III liquidity ratios on the offer side. We, the asset managers, must step in – as the buy-side intermediaries between the investors and the companies and States who will need financing.”

With financial markets “increasingly difficult to read, new types of assets such as infrastructures are difficult to access directly while new management techniques must not be reserved to the rich and big guys,” he said. “All this means our potential market is there to be served if we can prove that we bring added value to our clients”

He pointed to the huge US industry, which plays an essential role providing funds to issuers. “This is good news, at least if we, and our clients, especially institutional investors, are not crippled by an ill-calibrated tsunami of regulations”

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