Former FSA manager of transaction monitoring and Kinetic Partners member Monique Melis told the Tisa conference there is likely to be a big shift towards passive managers. She pointed to IMF forecasts that between the US and the UK, mainstream asset managers will lose about 20 per cent of their assets to passive and specialist firms. Profits will fall by 25 per cent and around 20 per cent of mainstream asset managers will disappear while net outflows will continue until at least 2010, says the IMF.
Seven Investment Management director Justin Urquhart Stewart said: “Those who have lived on the hog’s back and got used to a level of fat and comfort are going to have to reset their businesses as we go through leaner times.”
Melis, who was previously head of business development at the Cayman Islands Stock Exchange, also told delegates she believed the tax haven did not have a strong regulatory regime. She said: “The regulator there is not very effective, it will do nothing there unless it is prompted by the IMF or a bigger international body.”