With the recent Libor scandal failing to shake asset managers' confidence in London, emerging centres will have to work hard if they are to overtake the UK capital as the world's leading asset management centre.

If there was ever a time when it might seem as if London and New York were in danger of losing their appeal as finance centres, it is now. The past few months have seen a succession of potentially damaging headlines focusing on London's Libor fixing scandal and the charges brought against Standard Chartered by New York's regulators. Against this backdrop, asset managers might understandably feel the time is right to move to pastures new.

Results from The Banker's global asset management survey, however, show that London and New York are still the leading locations for world's asset managers. It seems, for the time being at least, that the advantages of operating out of such established centres outweigh any downsides that have been highlighted by recent events.

Rather than losing ground, London actually seems to be increasing its appeal among asset managers. A large proportion of the 58 senior professionals that responded to The Banker's survey name the UK capital as the leading location for the global asset management industry, singling it out for its favourable business environment, the quality of human resources and proximity to markets. The city's appeal is also attributed to the specific market expertise found in the city and its position as an emerging market centre.

Yet the onslaught of increased regulation, which will impact London quite heavily, continues to be a concern for those based in the city, particularly smaller firms for which increased regulation carries a relatively higher cost. Such managers may consider looking outside of London, as other hubs gain momentum and continue to attract new business. Full survey results and participants’ views make for a fascinating read on page 3.

Future favourites

When asset managers were asked to rank the most promising financial hubs, the Brazilian city of São Paulo came out on top, followed by China's Shanghai and the city-state of Singapore. São Paulo has enjoyed a rapid ascent to global financial centre status and its significance in the industry is set to expand in the coming years, with respondents citing Brazil's strong economic growth as the city's chief appeal.

São Paulo is not the only Latin American centre vying for prominence in the asset management industry, however. On page 15, the Brazilian city is compared to the smaller but more established Chilean capital of Santiago, which is ranked as the second most attractive location for managing investments into Latin America, behind its Brazilian rival.

Asian centres are seen as the best location for managing investments into the BRIC economies of Brazil, Russia, India and China. Hong Kong is the leading location from which to manage such investments, followed by Shanghai and Singapore. When it comes to naming the best locations for managing investments into south-east Asia, however, Singapore comes out on top, with Hong Kong ranking a close second and the Malaysian capital, Kuala Lumpur, a distant third. 

Tough competition

With no clear leader among Asia's financial centres, the race is now on among contenders such as Hong Kong, Shanghai and Singapore to become the leading centre in the region. With Singapore already taking business away from Switzerland, The Banker looks at the likelihood of an Asian centre becoming the world's new wealth management capital on page 9.

Dubai has retained its position as the preferred location for managing investments into the Middle East and north Africa (MENA) region, yet other centres in the area are raising their game, developing regulatory frameworks that aim to attract a broader asset management community. Historically, political instability has meant that a large proportion of local investors’ extraordinary wealth had been kept outside of the region, but this may be about to change. As it does, the rivalry between Dubai, Bahrain and Doha – which was ranked third in the MENA table – will very likely intensify, as explained on page 12.

Regulatory developments, economic growth and changes in political stability are bound to reshape the global asset management space in the future, giving further momentum to emerging financial centres. Although their progress has been incredibly promising so far, the gap between emerging and established financial centres will take time to fill. London and New York are still best in class, a fact confirmed by Los Angeles-based Oaktree Capital’s chairman Howard Marks, who says: “We have offices all over the world, but these are never going to take over from London or New York.”


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