ING Direct 2002 Annual Report Download - page 45

Annual Report 2002 · ING Group42
Report of the Executive Board
Strategy
With EUR 449 billion in assets under manage-
ment, ING is a leading asset management
organisation that offers a complete range of
investment products to meet the needs of
institutional and retail investors. ING is
committed to delivering excellence in invest-
ment performance and client service quality
through its ‘global investment expertise, local
client focus’ business model. Increasingly, ING’s
distribution channels have come to rely on close
collaboration with the manufacturing and client
servicing capabilities of ING Investment Manage-
ment. ING believes that a truly integrated
financial product offering at retail customer level
can only be achieved by establishing an
integrated local retail organisation. Addition-
ally, good investment performance is key to
continuing to be a successful and profitable
asset manager; therefore ING will step up its
efforts to further improve its investment engine.
ING’s chosen business lines in the field of
asset management are: institutional asset manage-
ment, mutual funds, real estate, alternative
assets and fund administration and trust services.
Investment performance
As is normally the case in a highly volatile and
depressed market environment, ING’s invest-
ment performance remained under pressure.
Still, in terms of long-term performance ING did
relatively well compared to benchmarks and
peers, benefiting from its broad diversity, both
geographically and product-wise. More than
50% of assets of ING’s funds outperformed their
relevant benchmark, and in comparison with
peers more than 60% of ING’s fund assets
showed an above-average performance.
Organisation
In 2002, ING Asset Management continued to
rationalise its asset management business
structure by integrating ING Investment Manage-
ment and ING Aeltus (itself a merger of ING
Furman Selz Asset Management and Aeltus,
completed in 2001). In order to improve alignment
with the distribution channels, ING Investment
Management was regionalised. Over the years,
an ever larger part of ING Asset Management’s
profit contribution to ING has been generated
by the sale of mutual funds. Efficient delivery of
 
Assets under management
declined by 13% to
EUR 449 million, mainly
due to falling stock
markets and weakening
exchange rates
—
Over 60% of assets of ING
funds outperformed peer
group
—
ING Investment
Management integrated in
Executive Centres Europe,
Americas and Asia/Pacific
—
Global co-ordination of
strategy and operations
 
ING aims to be a global top-ten (currently number 14) and a European top-five (currently
number seven) asset manager with an above-average investment performance.
 
LINKING THE INVESTMENT
ENGINE TO DISTRIBUTION
One of the sectors seriously affected by 2002’s difficult market
environment was the asset management industry. Lower
equity prices translated into lower fee income. In addition,
investors switched from equities into lower-margin fixed-
income products. Under these difficult circumstances, ING’s
asset management business generated a pre-tax profit of
EUR 175 million – just 5% below last year. ING’s assets under
management declined by 13% from EUR 513 billion to EUR 449
billion. The strong inflow of new funds (EUR 7 billion) did not
offset losses from falling stock markets (EUR 37 billion) and
weakening exchange rates against the euro (EUR 39 billion).
OPERATIONAL RESULT
BEFORE TAXATION
in millions of euros
175
5,466
ING Asset Management 3%
Rest of ING 97%