Continental Europe’s Banks and Insurers Must Revamp Asset Management To Drive Growth, Avoid Market Erosion: New Casey Quirk Study

DARIEN, Connecticut, June 15, 2011 -

To compete more effectively with foreign and independent asset
management companies and unlock the franchise value of their
investment subsidiaries, Continental Europe’s banks and insurers,
owners of over euro 12 trillion in managed assets, must embrace
significant structural changes, according to a new report by Casey,
Quirk & Associates, a management consultant focused on the
global asset management business.

While the wholly owned asset managers of Continental Europe’s
banks and insurers control approximately 30% of the world’s total
in managed assets, their growth rate in the five years through 2010
trails that of U.K., U.S., and Australian counterparts, and they
have steadily lost market share to foreign entrants in their
principal market, long-term European mutual funds, according to
Casey Quirk’s white paper, Untapped Opportunity: Realizing Value
in Continental Europe’s Asset Managers.  By adopting
growth strategies highlighted in the study, Continental Europe’s
banks and insurers can unlock an additional euro 175 billion of
franchise value from their asset managers by 2015, increase
revenues by 24%, and add euro 2 trillion-plus in new client
money.

Offering equity linked to long-term asset management performance
will help European banks and insurers battle more effectively in
the war for talent, according to the report. Investing in
distribution channels that are not affiliated with the parent banks
and insurers is another crucial growth initiative, according to the
Casey Quirk study, along with rationalizing the array of investment
products offered, and determining whether to fully globalize or
retrench to concentrate on select European markets.

“These changes will spur growth in Continental Europe’s asset
managers and make them as competitive as their foreign
counterparts, both at home and abroad,” said Kevin Quirk, partner
at Casey Quirk and one of the report’s authors. “Moreover, these
enhancements will create significant value for their parent banks
and insurers, a critical advantage in Europe’s crowded financial
services marketplace, where fierce competition for shareholder
capital has begun.”

Continental Europe’s asset management operations are worth
approximately euro 150 billion today, according to Casey Quirk’s
analysis. That’s the equivalent of approximately 7% of the current
estimated enterprise value of Continental Europe’s banks and
insurers. Optimizing growth strategies recommended in the report -
through a combination of stronger asset-gathering, higher fee
realization, and greater efficiencies - would boost their valuation
to a level approximately that of listed money managers, according
to Casey Quirk.

“Historically, Continental European banks and insurers have
viewed their asset management operations more as utilities that
provide services to their other core businesses,” said Ben
Phillips, a Casey Quirk partner and co-author of the report. “The
2008 global financial crisis significantly changed perceptions
within Continental European banks and insurers by illuminating the
inherent value asset management can have relative to other
financial services franchises. Shareholders, too, increasingly
realize this and are willing to pay a premium for financial
services companies with vibrant asset management businesses.”

About Casey, Quirk & Associates
LLC

Established in 1987, Casey, Quirk & Associates is a
management consultant focused solely on advising investment
management firms worldwide. We help our clients develop business
growth strategies, improve investment product prospects, evaluate
new opportunities, and enhance incentive alignment structures. Our
industry knowledge and experience, proprietary data, and global
network of relationships make Casey Quirk the leading advisor to
the owners and senior executives of investment management firms
globally. For more information, please visit our website at href="www.caseyquirk.com/">www.caseyquirk.com

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