BCG Forecast: Institutions to seek “innovative products” such as HF and PE
Aug 10th, 2009 | Filed under: Institutional Investing, Private Equity, Today's Post
“Innovation” is often held up as the engine of growth for modern economies. Technological innovation, business process innovation, even social innovation, have carried the hopes and dreams of companies and economies alike.
Then there’s financial innovation.
This new four letter word has been blamed for everything from the economic crisis to the cooler than normal summer in the Northeastern US. But we contend what some have termed “pure financial innovation” is much different than innovation in the financial services industry.
A new report on the global asset management industry from the Boston Consulting Group makes this point in spades (available here with free registration). The report argues that after the fiasco of the past couple of years, institutional investors will demand “innovations” such as alternative investments.
Says BCG:
“Institutional investors have sustained substantial losses during the crisis despite highly diversified strategies. They will likely continue to increase the diversification of their portfolios and seek innovation to help them achieve this goal.”
So what kind of “innovation” will they seek? The chart below from the report answers this question: More…
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