tailieunhanh - Most Likely to Succeed: Leadership in the Fund Industry

AMCs are, at times, weighed down by the number of schemes they offer or are under management (in some instances they are more than 200). This may result in a negative impact on the operational efficiency and profitability of the AMCs. The NFO boom that happened a few years ago has left behind a proliferation of schemes, some with overlapping objectives and investments. Yet, each scheme brings with it operational costs driven by regulatory, compliance and risk requirements. Overlapping schemes may be analysed and the possibility of merging overlapping schemes, or discontinuing such schemes or schemes with a less-than- optimal AUM. | AHEAD OF PRINT PERSPECTIVES Financial Analysts Journal Volume 67 Number 6 2011 CFA Institute FAJ Most Likely to Succeed Leadership in the Fund Industry Robert Pozen and Theresa Hamacher CFA What is the critical factor for success in the . mutual fund industry Is it top-ranked investment performance innovative products or pervasive distribution In our view it is none of these factors despite their obvious importance. Instead the best predictors of success in the . fund business are the focus and organization of the fund sponsor. We believe that the most successful managers over the next decade will be organizations with two characteristics dedication primarily to asset management and control by investment professionals. Our view is based on research for the book The Fund Industry How Your Money Is Managed Pozen and Hamacher 2011 . Dedicated asset managers firms deriving a majority of their revenues from investment management dominate the industry as shown in Table 1. The table ranks . fund families by assets under management in 1990 2000 and 2010 and shows dedicated asset managers in boldface. At the end of 2010 8 of the top 10 firms were dedicated to investment management as were 14 of the top 25 firms. Dedicated firms have held this dominant position for the past 20 years in 1990 13 of the top 25 firms were dedicated to asset management only 1 fewer than in 2010. Moreover the market share of the dedicated managers in the top ranks has climbed over the last two decades. In 1990 the dedicated firms in the top 10 had a combined market share of percent by the end of 2010 that number had grown to percent. Similarly the market share of the dedicated firms in the top 25 rose from percent in 1990 to percent in 2010 even as the portion of industry assets held by the top 25 firms in aggregate fell from percent to percent. Robert Pozen is senior lecturer at Harvard Business School Cambridge Massachusetts and senior research fellow at .