Putnam Lovell’s “Belle Epoque” for Money Management
Dec 13th, 2007 | Filed under: Institutional Investing“Core business lines will feature products with less performance risk, such as ETFs, lifecycle funds, and product structuresConversely, higher-alpha products with incentive fees will be more lucrative, but risky, given their reliance on key talent and sustainable performance—lightning in the proverbial bottle. Fund managers will experiment with several business models to retain the necessary talent, including partial ownership and multiaffiliate structures.”
- Putnam Lovell, After the Belle Époque: The Future of Fund Management
In this comprehensive report (free with registration) on the future of global money management, Putnam Lovell refers to the past 25 years as a Belle Epoque, when the industry was “blessed with a childhood built on government subsidies” (pension legislation etc.). Now, says the firm, the industry is set to experience “turbulent markets, onerous client demands, fierce competition and shifting sources of revenue.” Furthermore, they say, ”Demographic trends and relentless innovation have combined to create powerful forces that are revolutionizing the marketplace.”
But contrary to the report’s contention that the Belle Epoque is over, we say it has just begun.
Student of history will know that Belle Epoque (Beautiful Era) refers to a period in Western Europe beginning in the mid to late 19th century and ending with World War I. While it’s true that the Belle Epoque was marked by advancements in standards of living and wealth, it was first and foremost an era of rapid technological, political, artistic and scientific advancement (witness Pasteur, Freud, Nietzsche, Faraday, Darwin). In fact, it is often called The Second Industrial Revolution.
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