Asset Managers: Taking a Longer Term View

07 Dec 2010

London, UK

Overview   

One of the causal factors of the recent financial crisis was an increasingly short-term time horizon by investors. This event discussed incentives to encourage a longer term approach to asset management. The ICFR is uniquely placed to provide a forum for discussion on these issues among participants from different fields in an environment which fosters a constructive and policy orientated outcome.

The presentation by Kirill Ilinski* from Fusion Asset Management, who introduced a new incentive proposal for long term asset investment was the beginning of a series of discussions focussing on investor incentives. He talked about a new compensation structure, called the Shock Absorber Fees, for companies in the financial sector.  The Shock Absorber Fee (SAFe) is a new structure for performance-based compensation, designed to remove conflicts of interests between managers and investors, improve quality of investment products and mitigate risk to global financial system from irresponsible short-term orientated financial management.  It could have considerable social and economic benefits ranging from partial de-risking of investments, to better protection of non-professional participants directly or indirectly involved in financial markets, and wider participation in financial markets bringing higher rate of investment and global productivity growth. 
 

Further Resources  

 Click here to download the summary

 

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