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Monday, May 15, 2017

$385 BILLION FUND CHIEF: Morale in the asset management industry is low despite stock markets being high

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Martin Gilbert is the cofounder and CEO of Aberdeen Asset Management, a $385 billion UK-based money manager. 

The fund giant specializes in equities, fixed income, alternatives, and property.  It has announced a merger with UK peer Standard Life, in a deal that would create a group with a combined £581 billion ($750 billion) in assets under management. Gilbert is due to be co-CEO of the combined group. 

Business Insider sat down with Gilbert on Monday May 8, and talked about what’s going on in the economy and the state of the active management industry. Following is a transcript of the video.

MARTIN GILBERT: I think the asset management industry, especially in the US, is going through a pretty tough time. If you speak to a CEO of a US asset manager, morale would be at a low, even though stock markets are at almost record levels. I think it’s this march of the passive is eating into the flows of the active asset managers here in the US. It’s especially prevalent in US large-cap compared to say, emerging market equities. So it is really leading to them to think about what they do with their business models here in the US.

I think for some investors just buying an index fund is the right way to go. But again, good active fund managers can outperform indices consistently. So if you do find the right active fund manager it’s clearly better than a passive fund. But I would say in areas like US large-cap, which are becoming more and more commoditized in the US. Even the Warren Buffets of this world would buy a passive fund rather than active.

 

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May 15, 2017 at 06:21PM

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