While asset management CEOs’ outlook for the global economy remains gloomy, with only 18% expecting it to improve in the next 12 months, and 51% expecting it to stay the same, this represents an improvement over last year when 44% of CEOs voiced ‘extreme concern’. While fiscal difficulties in Europe and the US aren’t expected to disappear overnight, CEOs anticipate a positive resolution is on the horizon.
The largest proportion of CEOs, 39%, sees organic growth in their domestic markets as offering the greatest immediate potential. But reflecting the strategic challenges they face, many are also looking to deploy more fundamental measures such as mergers, joint ventures, strategic alliances or establishing new operations in foreign markets. 58% of asset management CEOs plan an acquisition, joint venture or strategic alliance in 2013 – by comparison only 32% and49% of their banking and insurance peers respectively plan such radical courses of action. What’s more, 35% of asset management CEOs are also planning to divest businesses –showing how they’re shuffling their product capabilities to meet investors’ changing requirements.
CEOs are looking to markets such as India and China for growth, whether through setting up local operations or attracting assets from local institutional investors such as sovereign wealth funds. They have highest hopes for the Middle East, India, Latin America, China and Southeast Asia. Reflecting its economic difficulties, Western Europe is the region from which they expect least.
What worries CEOs the most?
Volatile economic growthand government austerity policies remain the biggest economic and policy threats to growth, according to 81%and 77% of CEOs respectively, while 71% of CEOs name over-regulation as a threat.
Regarding potential business threats to growth, the greatest proportion of CEOs, 55%, considers the increasing tax burden as the biggest threat while a sizeable minority (46%) see a talent shortage as an issue.
Jobs and the search for talent
Asset management CEOs view talent management as an increasingly important area for refining strategy, with 73% of those CEOs planning to change strategy anticipating doing so in this area. New models for remunerating investment professionals are emerging, just as the importance of culture and in-house talent development is increasing.
51% are planning to hire more people in the coming year. These jobs are most likely to be front office positions such as portfolio management and sales roles.
Notes to editors:
For PwC's 16th Annual Global CEO Survey, 1,330 interviews were conducted in 68 countries during the last quarter of 2012. By region, 449 interviews were conducted in Asia Pacific, 312 in Western Europe, 227 in North America, 165 in Latin America, 95 in Central & Eastern Europe, 50 in Africa and 32 in the Middle East. 108 Asset Management CEOs were interviewed.
The full survey report with supporting graphics can be downloaded at www.pwc.com/ceosurvey.
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