The 2004 Barra-Greenwich Associates survey of European and North American-based CIOs found that 90 per cent of those surveyed expected assets under management to increase over the next 12 months — primarily from market appreciation and new client mandates.
CIOs surveyed were particularly optimistic when asked about growth in alternative asset classes including hedge funds, private equity and structured fixed income. The majority of CIOs surveyed believe that increased demand in these asset classes will have a marked influence on their business. To enhance their firms’ expertise in this area, the survey reports that CIOs plan to introduce new products and personnel and pursue additional acquisitions and partnerships.
Ninety-seven per cent of those surveyed agreed that risk management is more, or equally important, than it was a year ago to their firm and clients. Risk management systems have evolved to serve a variety of functions across investment organizations — from enterprise-wide risk analysis to front-office decision support. While risk control has long been a focus of risk and compliance officers, the survey indicates that risk is becoming more important to portfolio managers and CIOs as well. To that end, the survey results show that “attracting and retaining clients” is a primary motivation for enhancing risk management capabilities.
“Barra has always believed that risk management should be an integral part of the investment decision-making process,” says Aamir Sheikh, president of Barra. “It’s not surprising that this year’s CIO survey observed the need for risk management adoption among a broader group of investment professionals in the wake of a number of well-publicized surprises and extreme events.”
The 2004 Barra CIO Survey polled 62 chief investment officers of major U.S., U.K. and Continental European asset management firms.