ING Direct 2008 Annual Report Download - page 45

ING Group Annual Report 2008
43
Asset management
Key points
> Total assets under management,
which include ING Investment Management,
ING Real Estate and ING Private Banking
decreased by 14% to EUR 551.3 billion
> Investor confidence hit hard by the
global financial crisis resulting in sharply
lower net inflows
> ING Real Estate total business portfolio
marginally lower
> ING Private Banking recorded net inflows
2008 proved to be a very challenging year for the asset
management industry. Sharp falls in asset values and lower
net inflows had a major impact on industry profitability.
Client appetite for risk almost disappeared with alternative
investments such as hedge funds and private equity hit hard,
and with retail clients in particular seeking sanctuary in
low-risk funds or those with guarantees. ING’s investment
management business was to a certain extent insulated
from the global financial turmoil because of relatively stable
inflows from ING’s insurance, investment and pension
businesses. ING Real Estate’s total business portfolio was
EUR 106 billion, marginally lower than 2007. Despite the
market turmoil, ING Private Banking achieved net inflows.
FINANCIAL DEVELOPMENTS
Assets under management fell by EUR 91.4 billion, or 14.2%, to
EUR 551.3 billion in 2008, as a result of the sharp deterioration in
financial markets. Lower asset prices for equity and fixed-income
securities had an adverse impact of EUR 99.1 billion. Despite the
depressed financial markets, ING recorded a net inflow of EUR 17.4
billion in 2008. All lines of business contributed to this net inflow
with the exception of Insurance Europe which reported a net
outflow of EUR 2.2 billion. Acquisitions and divestments had a net
negative impact of EUR 6.2 billion and exchange rate movements
reduced assets under management by EUR 3.6 billion.
ING INVESTMENT MANAGEMENT
ING Investment Management (ING IM) is the principal asset
manager of ING Group with EUR 332.5 billion in assets under
management at the end of 2008 compared to EUR 390.2 billion
at the end of 2007. ING’s investment management business
continued to pursue its goal of strengthening its position in global
asset management. Growth was constrained by the financial
turmoil and the dampening impact it had on investor enthusiasm.
Despite this, ING IM’s global distribution reach and strong
emerging markets presence, together with its scale in fixed
income, strong brand recognition and access to a global network
of ING channels and flows held the company in a relatively solid
position in challenging market circumstances.
The company fared relatively better in the institutional segment
where it managed to maintain and in some regions attract net
inflows. Retail flows were adversely affected by investors moving
to lower-risk products or those with a capital guarantee.
At the end of the year, the investment management business
delivered investment performance with 46% of mutual fund
assets outperforming their peer median and 61% of mutual funds
outperforming their benchmark on a three-year basis. Morningstar
awarded 76% of ING’s ranked mutual funds with 3 stars or higher.
All three regions – Europe, Americas and Asia/Pacific continued to
focus on the core strategy of delivering a wide range of innovative
investment strategies to ING’s global network of businesses and
third-party clients.
Assets under management by manager
Assets under management by client category
in EUR billion
Investment Management
Europe 23% 129.5
Investment Management
Americas 25% 139.4
Investment Management
Asia/Pacific 12% 63.6
ING Real Estate 13% 69.5
Private Banking 10% 53.1
Other 4% 23.6
Externally managed 13% 72.6
Total 100% 551.3
in EUR billion
Insurance policy holders 19% 103.0
Institutional clients 25% 140.5
Retail clients 17% 91.6
Private banking clients 11% 62.0
Proprietary 28% 154.1
Total 100% 551.3