State Street Corporation this week released its latest Vision Focus report: “The Changing Shape of European In
State Street Corporation this week released its latest Vision Focus report: “The Changing Shape of European Investment Management.” One of the central tenets of the report is that regulatory developments have shifted away from enhancing market efficiency and more towards protecting investors on the back of calls from increased transparency and investor security. “Ucits V is targeted at issues such as clarifying the roles and responsibilities of depositaries and establishing a governance structure for asset managers’ remuneration,” wrote Marty Dobbins, a State Street MD based in Luxembourg. He added that, given the volume of emerging regulation, the challenge for all asset managers would be staying focused on their core business of building profitable portfolios; something that State Street is addressing by helping guide clients through the regulatory maze. Additional measures (e.g. requirement to produce KIID documents under UCITS V) could increase complexity in terms of reporting and costs, with the paper pointing out that fund managers might need to make a “root-and-branch” assessment of their existing business models. Dobbins wrote that there would be “winners and losers” when it came to managers looking for consistent servicing solutions at both the regional and local market level. “Their identity will determine the future shape of the European investment management industry,” wrote Dobbins. Looking to the future, the paper said that the marketing of newcits strategies, which could be accelerated by the AIFMD, is bringing hedge fund-like vehicles to a wider audience, but it would require more investor education. Asset managers, wrote Dobbins, would need to be “highly cognisant” of the type of investor they target.
