Chapter 1

1. disintermediation & securitization (change in the banking industry)

2. institutional investors started to outsource part of there asset management to external investors in segregated accounts

3. rising assets prices due to inflation, falling interest rates & rising income share of capital ownwers

-> strong growth of AuM

1. high per capita income

2. high savings-rate -> capital accumulation

1. very conservative private & institutional investment policies

2. very small funded pension system (direct pension paid by Government)

1. performance was easy to achieve by rf fixed income investments (-> no strategic factor)

2. No systematic asset liability process

3. no existence of Investment Consultants

4. Asset Management manadates were awarded based on friendship

5. Asset Management service was offeres as “one stop shopping” by one bank -> low cost transparency & suboptimal combination of service providers

6. Low market share of foreign asset managers (especially institutional)

1. necessary asset performance hard to achieve -> key competition factor

2. Important to find the optimal asset allocation (ALM-studies) -> to conservative die slowly, to aggressive die quickly

3. Start of Investment consulting industry

4. asset management mandates are awarded as result of rigorous selection process

5. debundling of service package around asset management -> more cost transparency & optimal combination of service providers

6. German market opened for foreign asset managers

-> “Zero Sum Game” view of the world

single pool for many investors -> each investor receive units in proportion to its contribution

bespoke single-client mandate for major investors -> managed seperately & tailored investment strategy