But when you do a market environment analysis and understand what the hell has actually happened in the last six months, it’s consistent with their process and the expectations, conditional on the market environment. That’s the important part for us. It’s all in context. If we saw these sorts of performance numbers in a nice calm environment, we’d be tearing our hair out. We’re very keen for our managers to talk to us about unintended exposures to markets. The credit managers. Do you really know what you’re doing in terms of your credit spreads? Can you get in and out of positions with the credit market being so low relative to historical norms? And so conditionality on current environment makes it a much easier job to think about what’s normal and what’s an abnormal performance.
Rose Challita: We’re finding our clients are not just interested in front office any more. They’re very interested in your back office. They’re interested in who the fund manager is. They’re very interested in the key people in the back office and drilling into the middle and back office processes as well. They’ve discovered that as an extension of their own risk. Drew Vaughan: An extension of the counterparty risk discussion is about the change that’s going on in ownership of organisations, because we’re seeing a lot of funds managers being sold off as part of a capital reconstruction arrangement that might exist with the parent company in a different location, outside of here.
That represents a new risk for funds because the entity they thought they were dealing with as a funds manager in that capacity could suddenly have its ownership changed, and all sorts of things could flow out of that over time. Michael Bailey: But is the confidence there to make a transition at the moment? Troy Rieck:. I think a lot of funds have been standing still in the last six months. They’re far too busy worrying about other things to think about, do I turn over my 12 Australian equity managers.
But I think they’re now getting used to the fact that the crisis is not going away and volatility is here to stay for a long time. And that transition business is ready to come back to the market. And we’ll also see the asset consultants, having done their half year reporting, will go round to the trustee boards for their January and early February meetings. So transitions will pick up, but we’ve seen a change in the industry as well. The risk appetite on behalf of investment banks and transition managers is much lower on an industry aggregate basis than it was 12 to 18 months ago.