two kinds of forecasters,” said the economist John Kenneth Galbraith. “Those who don’t know and those who don’t know they don’t know.” Asset management is a business built on the notion that the future is somewhat knowable, even if in large part it is not. So we must look for omens. Today’s “dishevelled” or “inchoate” borrower should not be expected to pay back its debts tomorrow, asSpeculations about the future are also often helpful in organising thoughts about the present.
A second prediction is that competition in asset management will revolve around products designed for particular needs. The present-day industry is a creature of the baby-boom era. Many boomers have built up assets in workplace schemes in which benefits depend on the size of a pension pot at retirement. Their needs are changing.
Some popular predictions about private markets—that they will be “democratised”, and fees will come under pressure—will turn out to be wrong . Private-equity fees do look out of whack and big pension-fund managers are more inclined to haggle over costs. Returns on private equity are likely to disappoint. Yet fees for public equity came down because there was a cheaper option: buy the index. Private-equity stakes are not as tradable as listed shares, so there is no index. So fees will stay high.
Finally, there is China, where the uncertainty is perhaps greatest. Sceptics point to China’s record of allowing foreigners to profit only as long as it takes Chinese firms to copy and supplant them. Asset management is different. Unlike with makers of breakfast cereals, it is hard for consumers to judge the merits of an asset manager. It is equally hard for copycat firms to find out what works and what doesn’t.
FAKE NEWS
horrible