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South Africa: Fund Managers 'Lack Skills'
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Business Day (Johannesburg)
2 July 2008
Posted to the web 2 July 2008
Sanchia Temkin
Johannesburg
THE credit crisis highlighted a skills gap in investment management, according to a report issued yesterday by KPMG International at the Fund Forum International in Barcelona.
Research found that while the use of complex financial instruments was rising, 50% of fund manager respondents admitted to having no in-house specialists with experience of the complex financial instruments in which they invested.
The study involved 333 executives in 57 countries across the global fund and investments management community, 31% based in the US, 29% in western Europe and 23% in Asia Pacific.
Tom Brown, European head of investment management in the UK said: "Staff skill sets have struggled to keep up with the growing sophistication of the industry. These firms cannot afford to continue flying blind. Migrating experienced people from the investment banks to investment management firms could be one of the ways of addressing this issue."
The research found the fund management industry faced the challenge of adapting to a radically new business environment in the wake of the credit crisis, and had to focus on risk-management processes and governance structures in addition to the skills gap.
Trevor Hoole, MD of KPMG Southern Africa's financial services practice , said banks globally had borne the brunt of the credit crunch, "but this new research shows that the fund management industry has been damaged too and not just in terms of performance".
Hoole said that the industry faced a challenge to build bottom line and respond to issues the credit crunch raised.
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The study found many fund managers were shaking up internal processes and controls.
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