TWST: In the recovering economy, what do you think are going to be the primary headwinds for the asset managers in 2011?
Mr. Kim: As always, I think the biggest risk for the asset managers is really a prolonged equity market downturn since obviously, assets under management and therefore earnings are highly leveraged to the broader markets. Also, I think a derivative of a sustained market pullback would likely be a retrenchment in risk appetites more broadly, so investors might move assets back into, let's say, lower-fee fixed income or money market funds, or even take money out of the system altogether, which would restrict a source a growth for the industry. Then finally, I think potential regulatory change could impact certain, what I call "industry hot spots," whether that's money market funds, 12B-1 fees, or more broadly, the relationship between the asset managers and their distribution partners. Having said that, our view is that any regulatory changes would likely be more evolutionary as opposed to revolutionary, and would probably be phased in over a relatively long period of time. So I think those are the risks or headwinds that I would highlight for the group.
TWST: How far up the risk curve do you think retail investors and institutional investors are going to move in 2011, and how will that impact your group?
