Mr. Kim: I cover what I would call the pure-play asset managers. So some of the bigger companies include AllianceBernstein (AB), Franklin Resources, Invesco, Janus (JNS), T. Rowe Price (TROW), amongst others, so that's my area of focus. The one name that I cover that's a bit different is KKR. Obviously they are more focused on private equity funds, but I think we're seeing the industry continuing to consolidate, with the bigger players able to offer a broader range of investment products. So companies specializing in a particular strategy or a particular niche are looking to enhance their scale and diversification.
TWST: What level of organic growth do you expect to see out of your group over the next 12 months? What will be the key drivers behind that growth?
Mr. Kim: I think that organic growth is going to be relatively subdued for the next couple of quarters, as market volatility remains elevated. I think both the retail and institutional investors are still somewhat risk averse, just given the market environment that we've seen more recently, with fixed income strategies garnering most of the flows. So if I had to put a number on it, I think industry organic growth of something in the low-single-digit percentage range for the next couple of quarters is not unreasonable, and then building back up to something in the mid-single-digit range beyond that. Over time, I still think we are going to see investors re-risk their portfolios and step back into higher-return equities and alternatives once the broader markets stabilize. Keep in mind, many pension plans are still well underfunded today. Also with the Baby Boomers' fast-approaching retirement, I think a lot of investors are going to need to reallocate into riskier assets in order to rebuild their portfolios. So I think over time, we will see this reallocation back into equities that a lot of people have been anticipating for quite some time.
Tickers included in this excerpt: BEN, IVZ, KFN
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