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Managers bullish on future revenues
18 February 2014
New PwC report shows asset management CEOs are confident about recovery in revenues and global economy
A staggering 97% of asset management CEOs are confident that revenues will rise over the next three years, according to PwC’s annual survey of 123 CEOs in 37 countries.
More than half said the global economy would improve during the next 12 months, compared with 19% last year. As a result, some 58% of CEOs said they were planning to hire more staff this year.
Paula Smith, UK asset management leader at PwC, said: “Asset management CEOs are confident about their prospects and getting more so as equity markets have rallied and fundamental shifts in the financial ecosystem increase demands for their investment services. What’s more, their optimism is taking root as they actively invest to stimulate future growth. Their expansion plans include mergers and acquisitions, investment in technology and hiring more people. They’re voting with their pocket books."
Yet optimism was shadowed by uncertainty over regulatory changes and the response of governments to fiscal deficits and debt burdens. Such concerns pose the greatest challenge to managers where eight in ten CEOs said operating costs were increasing, while 50% said their ability to innovate is held back by regulation.
Smith said: “Cost reduction is still important but it’s becoming less of a priority as asset management CEOs make plans for growth. It’s interesting to note that they see the best opportunities for growth in the US and Western Europe. But regulation clearly remains a strong headwind.”
“As they plan for the future, asset management CEOs are firmly in expansion mode. They’re investing for both organic and inorganic growth – pursuing the former through hiring more people and increasing their technology spend, and the latter through seeking out mergers, acquisitions and joint ventures.”