Managed Money Report – Spring 2008

We are pleased to introduce Investor Economics’ Managed Money Advisory Service (MMAS). The release of this report represents the official launch of this new service, which is devoted exclusively and entirely to the business of managed money in Canada. The driving force behind MMAS is the belief that managed money is rapidly emerging as an important competitive paradigm within the Canadian financial services industry. The sheer size of this market—at $2.3 trillion—and the active presence of more than 500 competitors speak directly to this fact. Not unlike other sectors of the financial services industry, the nature of the managed money business is undergoing change. Assets are shifting into new market segments, new firms are entering the game, merger and acquisition activity is on the rise, and many of the biggest players are increasingly under pressure in their core business. The traditional distinctions are blurring, and money management firms—large and small—are attempting to locate new areas of growth and opportunity. The objective of MMAS is to help you navigate and position your firm for success in this evolving competitive landscape. The cornerstone of this new service is a one-of-a-kind fact base that quantifies the business of managed money from all of the main vantage points: size, structure, individual segments, main players, trends, market shares, growth rates, and more. While there are other databases and information sources that look at individual slices or sectors of the market, no other databank has mastered the challenge of linking and cleansing them, and eliminating the double-, triple- and over-counting that weakens their analytical value. Our primary focus is the analysis of the money management business in all its dimensions. In so doing we aim to explore both the supply and demand sides of the equation. As an example, the money management opportunity in pensions is increasingly about understanding the important structural shifts that are impacting upon the need for money management services—quantifying the shift from defined benefit to defined contribution plans, the extent to which money management services are being outsourced, and the growth of alternative strategies. Simply stated, the pension fund money management opportunity is greater than the totality of pension assets managed (i.e. the supply side). Quantifying the potential market opportunity available to money managers across all segments (i.e. the demand side) is also an important feature of our work. In our lexicon, “money manager” refers to those entities that compete in the business of managing money. This essentially encompasses the universe of ICPM registrants. While entities such as the Caisse de dépôt, OMERs and the Ontario Teachers’ Pension Plan clearly conduct extensive in-house money management activities, the assets they manage are excluded from our industry count and competitive tallies. Like all Investor Economics research offerings, the deliverables of MMAS will take the form of reports and service. Reports will be issued twice yearly, in April and October, providing the most recent update of statistics and trends in all components of the market. It is reasonable to expect that the depth and breadth of coverage will expand in the future as we build in new dimensions to our managed money research. Each report will highlight for particular subscribers where in the document they can locate data and information relevant to their own company. Beyond that, MMAS is all about service. This can come in many different forms, ranging from one-off data or information requests or data updates in the course of the year to full-blown management briefings. The latter are especially important, as they can provide a forum whereby key emerging market themes can be discussed and debated in the context of their strategic and competitive relevance for the client. The content of these presentations may be shaped in order to draw on a wider array of Investor Economics research that may also be of significance to the client’s managed money business. This information is valuable as background material for business planning and strategy development or for use in management retreats. We look forward to working with you on this new initiative. As always, feedback and suggestions are welcome and appreciated.