June 27, 2007: CSFB has a brainstorm..goes overweight on Asset Management stocks

Credit Suisse First Boston published a thorough analysis (78 pages) of the U.S Asset Management industry and has turned quite bullish on the group. I agree with their rationale.

CSFB expects a continuing asset mix shift into global and alternative products to be a key trend affecting business over the next several years.CSFB believes these asset classes are underrepresented in both US institutional and retail portfolios,and will "be a tailwind for money flows". Liability Driven Investing (LDI) and the acceleration of the retirement payout market as two other important developments that could change the landscape within the industry. In both instances, CSFB sees greater competition emerging from outside the industry, making scale, product breadth, coordination of global research and asset/liability management skills more critical to long-term success. CSFB sees a more than 50% upside for the top stocks in this universe.Congressional legislation to increase the tax burden on certain asset companies was factored into CSFB analysis.

There is a lot more in their report, but for brevity, here are the picks:


Best stocks: INVESCO

Close second: Fortress Investment Group (FIG) -- this is my favorite at the moment.

other "best bets":

Franklin Resources
T Rowe Price
AllianceBernstein
Affiliated Managers Group

CSFB ranks most others as neutral, but NONE as an under perform. Even Janus may make a buck or two.

I am trying to provide credible investment ideas in this market. I hope my published thoughts over the past days have been useful.