BGI
This is the first year Euromoney has made an award for best fund manager. Barclays Global Investors, the winner, now has over $1.1 trillion under management and that, along with ever growing profits, makes it an increasingly important part of Barclays Group.
While the fund management industry has struggled through difficult markets in recent years, BGI has bucked the trend and continued to bring in money and make a good return on it, both for itself and its investors
In 2003 it brought in $97 billion of net new business. Since the start of this year it has taken on a further $30 billion. These are impressive sums for an operation that was long rumoured to be up for sale.
Last year its profits shot up to £192 million ($351 million) from £111 million. And while this still leaves it some way behind, for example, Barclays Capital, which produced profits of £782 million, it is nevertheless moving strongly in the right direction.
Another misperception of BGI as purely a passive manager has been overcome as the active business has grown substantially.
Active management, including a thriving hedge fund arm, now generates as much profit as its more traditional index business, though this continues to develop with its exchange traded funds now proving extremely popular. This iShares business has grown to $40 billion since January 2003.
Global co-CEO Andrew Skirton says BGI has enjoyed success while the competition has been struggling. ?Some traditional firms have lost business, which has moved to us,? he says.
The reasons for BGI?s success are quite straightforward, says Skirton. ?We have delivered very good investment performance for clients. That has helped generate active fees,? he says. ?We have managed the business well in terms of cost discipline. We have increased efficiency in a lot of separate areas of the business. We have got outstanding technology.?
He adds that the strategy for maintaining growth is equally straightforward. ?We will continue to deliver investment performance because without that the business is not going to thrive,? he says. ?In order to do that we need to retain the right talent in the organization, to maintain our focus.?
And the bad news for competitors is that the appetite for growth is not diminished. Skirton says there is still plenty of capacity for more business.
