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FUTURE OF THE INVESTMENT PROFESSION SURVEY RESPONSES FROM THE MIDDLE EAST AND AFRICA RESPONSES FROM 133 SENIOR INVESTMENT DECISION MAKERS IN THE MIDDLE EAST AND AFRICA What is your title? For how many years have you worked as an investment management professional? Portfolio manager 21% Chief investment officer 16% 20 years or more Managing director 9% 14% Other 10-20 years 13% Research analyst 25% 11% 2-10 years Director of research Chief operating officer 63% 8% 18% Less than 2 years 3% 2 STRONG REPRESENTATION FROM CFA CHARTER HOLDERS AND MBAS Do you hold any of the following credentials? Master of Business Administration (MBA) 54% Chartered Financial Analyst (CFA) 39% Chartered Accountant (CA) 10% Advanced degree in a technical discipline such as mathematics or a natural science 9% Financial Risk Manager (FRM) 6% Certified/Chartered Public Accountant (CPA) 5% Certified Financial Planner (CFP) 4% Chartered Alternative Investment Analyst (CAIA) 3% Juris Doctor (JD) Other degree or professional designation Other graduate degree 2% 3% 26% 3 BROAD RANGE OF INSTITUTION TYPES What type of institution do you work for? Asset management firm 34% Family office 14% Financial advisory firm focused on institutional investors 11% Financial advisory firm focused on private investors 10% Private pension 8% Insurance company 8% Public pension Managers, 34% Advisers, 22% 5% Endowment 2% Foundation 1% Other Other, 11% 8% 4 NORTH AMERICAN RESPONDENTS COME FROM A BROAD RANGE OF AUM BANDS Where is your position located? Latin America 0% North America 0% Middle East and Africa What are your institution's assets under management (in USD)? $50 billion or more 8% 100% Europe 0% Asia-Pacific 0% $10 billion to $50 billion 20% $1 billion to $10 billion 29% $500 million to $1 billion Are you female or male? Prefer not to say, 1% Female, 13% 17% $250 million to $500 million $100 million to $250 million Less than $100 million 13% 2% 11% Male, 86% 5 SKILLS FOR THE FUTURE 6 SKILLS TO DETERMINE EXECUTIVE SUCCESS Which of the following skills will be more important for the success of <institutional leaders> in 5-10 years? Skills that will be most important for the success of... CIOs/PMs Ability to articulate a compelling vision for the institution CEOs of AMs 32% Relationship-building skills 41% CEOs of AOs 40% 35% 40% 37% Specialized financial analysis skills 27% 34% 32% Ability to instill a culture of ethical decision making 26% 34% 32% Understanding of corporate governance/regulations 30% Sophisticated knowledge of IT (e.g., programming, artificial intelligence, etc.) Knowledge of science, engineering, and mathematics Crisis management skills Consultative selling skills 34% 24% 34% 27% International and cross-cultural skills (including foreign languages) 14% 25% 17% 15% 37% 21% 27% 33% 20% 12% 34% 29% 21% 7 SOFT SKILLS EMERGE AS SOURCES OF EXECUTIVE SUCCESS CIOs/PMs CEOs of AMs CEOs of AOs Rank % Rank % Rank % Ability to articulate a compelling vision for the institution 4 32% 1 40% 2 35% Relationship-building skills 1 41% 2 40% 1 37% Specialized financial analysis skills 6 27% 4 34% 5 32% Ability to instill a culture of ethical decision making 8 26% 4 34% 6 32% Sophisticated knowledge of IT 2 34% 9 17% 9 20% 5 30% 7 25% 4 33% 9 24% 10 15% 10 12% Consultative selling skills 7 27% 8 21% 7 29% Crisis management skills 2 34% 3 37% 3 34% International and cross-cultural skills 10 14% 6 27% 8 21% Understanding of corporate governance/regulations Knowledge of science, engineering, and mathematics 8 MOST IMPORTANT SKILLS ARE OFTEN HARD TO FIND How available are each of the following skills in the labor pool of prospective employees? Skills that will be most important for the success of... CIOs/ CEOs of CEOs of AMs PMs AOs Very hard to find Somewhat availabie Hard to find Ability to articulate a compelling vision for the institution 4 1 2 9% Sophisticated knowledge of IT (e.g., programming, artificial intelligence, etc.) 2 9 9 6% Relationship-building skills 1 2 1 4% 18% Crisis management skills 2 3 3 Specialized financial analysis skills 6 4 5 Consultative selling skills 7 8 7 5% 30% Knowledge of science, engineering, and mathematics 9 10 10 5% 19% 6% 22% 34% 35% 8% 44% 13% 47% 13% 60% 31% 6% 8 4 6 Understanding of corporate governance/regulations 5 7 4 4% 17% International and cross-cultural skills (including foreign languages) 10 6 8 6% 26% 18% 44% 48% Ability to instill a culture of ethical decision making Readily availabie 17% 35% 11% 48% 38% 17% 39% 55% 56% 31% 17% 23% 38% 9 A SOLID MAJORITY CALLS FOR INCREASED TRAINING ON ETHICAL DECISION MAKING Q4. Over the next 5-10 years, which of the following skills should employers cultivate through structured training programs with their new employees? Skills that will be most important for the success of... CIOs/ CEOs of CEOs of Very hard to AMs PMs AOs find 1 2 9% Sophisticated knowledge of IT (e.g., programming, artificial intelligence, etc.) 2 9 9 6% Relationship-building skills 1 2 1 4% 18% Crisis management skills 2 3 3 8% Specialized financial analysis skills 6 4 5 6% Consultative selling skills 7 8 7 5% Ability to articulate a compelling vision for the institution Knowledge of science, engineering, and mathematics 4 Hard to find Somewhat Readily availabie availabie 34% 35% 13% 44% 47% 13% 42% 44% 48% 18% 53% 17% 51% 35% 30% 11% 48% 9 10 10 5% 19% Ability to instill a culture of ethical decision making 8 4 6 6% 22% Understanding of corporate governance/regulations 5 7 4 4% 17% 56% 10 6 8 6% 26% 31% International and cross-cultural skills (including foreign languages) 44% 60% 31% Training focus 38% 17% 39% 55% 17% 23% 38% 63% 51% 49% 60% 58% 66% 10 STRATEGIC THREATS AND OPPORTUNITIES FOR THE INDUSTRY 11 RESPONDENTS HAVE A POSITIVE VIEW OF GLOBALIZATION AND TECHNOLOGY’S EFFECT ON THEIR CAREERS We're interested in your views on how technology and globalization will affect investment management professionals' careers over the next 5-10 years. In the next 5-10 years, new information technology in the investment management industry will … 2% 17% In the next 5-10 years, globalization in the investment management industry will ... 1% Pose a threat to the employment of professionals like me 33% 17% 2 24% 3 4 40% 37% 8% 22% Offer new opportunities for professionals like me 12 TECHNOLOGY AND GLOBALIZATION OFFER STRATEGIC OPPORTUNITY TO FIRMS We're interested in your views on how technology and globalization will affect investment management firms over the next 5-10 years. In the next 5-10 years, new information technology in the investment management industry will ... 2% 37% In the next 5-10 years, globalization in the investment management industry will ... 1% Pose a strategic threat to financial institutions like mine 2 3 23% 4 24% 27% 26% 29% 11% 20% Offer strategic opportunities to financial institutions like mine 13 CONSOLIDATION, NOT FRAGMENTATION, OVER THE NEXT 5-10 YEARS A. In the next 5-10 years, I expect... 19% B. In the next 5-10 years, I expect... 21% 22% 47% 32% 60% Substantial consolidation of the peers and competitors of my institution Some consolidation of the peers and competitors of my institution Little or no consolidation of the peers and competitors of my institution Many new market entrants and competitors of my institution A moderate number new market entrants and competitors of my institution Few new market entrants and competitors of my institution 14 MORE THAN 70% OF RESPONDENTS FORESEE FLAT OR CONTRACTING MARGINS AT ASSET MANAGEMENT FIRMS C. In the next 5-10 years, I expect... 9% 31% 20% 13% 27% Substantial growth in profit margins among asset management firms Moderate growth in profit margins among asset management firms Little or no growth in profit margins among asset management firms Moderate contraction in profit margins among asset management firms Substantial contraction in profit margins among asset management firms 15 THE BIG PICTURE 16 RESPONDENTS SEE A POSITIVE CONTRIBUTION FROM THE PROFESSION—CONTINGENT ON “HIGHER PRINCIPLES” To what extent do you agree with the following statements about the role of the investment management profession on society at large? The investment management profession's current impact on society is... The investment management profession’s future impact on society is... The investment management profession's potential impact on society contingent on incorporating higher principles could be ... Very positive Somewhat positive 8% 76% 20% 17% 38% 47% Somewhat negative 41% 37% 0% 1% 15% 1% Very negative 17 OPTIMISM ABOUT ESG, TEMPERED BY REALISM ON OTHER MATTERS To what extent do you agree with the following statements about the investment management industry? Investors will continue to increase their allocations to passive investment vehicles over the next 5-10 years. Asset management fees generally reflect the value provided to clients. Financial centers in Asia will have increasing influence in the investment industry in the next 5-10 years. 24% 44% 8% 56% 14% 47% Environmental, social, and governance factors will become increasingly important to investment decision makers in the next 5-10 years. 22% Institutional investors will look to reduce costs by insourcing more investment management activities. 22% 35% Over the next 5-10 years, financial markets and capitalism will contribute to increasing economic equality. 21% 36% Meaningful increases in interest rates, economic growth, the equity-risk premium, and other macroeconomic indicators will occur in the next 5-10 years. 14% Clients are often sold inappropriate financial products 13% Strongly agree Agree Strongly disagree 11% 2% 21% 17% 17% 17% 27% 22% 40% Disagree 25% 21% 31% 31% 14% 2% 17% 38% 26% Financial markets/investment management are being regulated effectively. 17% 23% 26% 5% 3% 5% 14% 2% 19% 3% 20% 4% 28% 3% Neutral/no opinion 18