Eastern European Asset Management Industry Buoyant Despite Recession, Finds Frost & Sullivan

LONDON, December 8 - Although the Eastern European asset management industry has felt the
ripple effects of the global financial crisis, the region is expected to
witness long-term structural growth due to favourable macroeconomic
indicators. The development gap separating the western and eastern European
regions is likely to open new opportunities in various sectors, including
healthcare and financial services on the eastern European region during the
medium-to-long term (5 to 15 years) investment horizon.

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New analysis from Frost & Sullivan
(www.financialservices.frost.com), Eastern European Asset Management
Industry - Investment Analysis, indicates that eastern European countries
should exercise caution with regard to their fiscal position and remain wary
of the risk of high inflation.

"Lower penetration of mutual funds investments in household income
suggests ample scope for retail investments," says Frost & Sullivan Research
Analyst Kavitha Chakravarthy. "Effective marketing and awareness initiatives
are likely to help asset management companies capitalize on this
opportunity."

Lower net assets as a percent of GDP are indicative of the vast potential
latent in the asset management industry. Central and Eastern European
countries have the lowest net assets. Rising political stability, pro-market
reforms, growing purchasing power, huge infrastructure spending, and EU
membership make eastern Europe an attractive destination for investment. The
economies of Bulgaria, Romania, Slovenia, and Slovakia are poised to grow at
a positive rate, peaking during 2011 and 2012 and stabilizing thereafter.

The immediate prospects for the asset management segment look lacklustre
until at least 2010, but retail investor confidence will improve during 2010.
On the flip side, institutional investments such as pension funds compared to
retail mutual funds are performing well owing to their long investment span
and lock-in period. The eastern European countries are heavily dependent on
foreign investments and encounter severe financial pressure due to dwindling
FDI inflows into the economy.

The region experienced a drastic decline in foreign investments since
2007 in the wake of the lending boom and financial crisis. This had led to
the deterioration of the overall fiscal position in the eastern European
countries. Moreover, low market liquidity continues to concern the market.
The governments of these regions are taking corrective measures.

"There is also huge pressure on the Eastern European governments to
streamline their policies in order to comply with EU regulations," says
Chakravarthy. "Any lapse could prove costly for the government, potentially
affecting EU funding and membership."

Retail investors in Europe prefer investing in bank deposits as they
offer high rates of interest. Moreover, these investors are not fully aware
of the advantages offered by investment in mutual funds and other alternative
investments. The high cost of trading in these regions fuels anxiety levels.
Currently, investors seem to prefer investing in funds denominated in Euro,
in order to eliminate exchange rate risks.

If you are interested in more information on this study, please e-mail
Monika Kwiecinska, Corporate Communications, at monika.kwiecinska@frost.com,
with your full name and contact details.

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    Eastern European Asset Management Industry - Investment Analysis
                                  N67D

    Contact:
    Monika Kwiecinska
    Corporate Communications - Europe
    P: +48-22-390-4127
    F: +48-22-390-4160
    E: monika.kwiecinska@frost.com

www.frost.com

Monika Kwiecinska, Corporate Communications - Europe, Frost & Sullivan, +48-22-390-4127, fax, +48-22-390-4160, monika.kwiecinska at frost.com