Center for Asset Management Executive Director James Bacon MBA '76.
Center for Asset Management Established
CSOM-based center seen as a 'hub' of research for changing industry
By Reid Oslin
A newly launched center at Boston College is being hailed as the linchpin in a dedicated effort to chart a course for the asset management industry's uncertain future.
Connecting the acclaimed research skills of the Carroll School of Management's finance faculty with the significant holdings and influence of the Boston investment community, the Center for Asset Management also will offer CSOM finance students a unique vantage point on a field that is rapidly evolving, as center Executive Director and Board Chairman James Bacon MBA '76 notes.
"Asset management has been one of the most successful business models in history," said Bacon, a long-time asset management professional and former managing director of Putnam Investments' International Business Unit. "The problem is that we don't spend a lot of time on future strategy."
Bacon says the next 10-15 years will see a series of major trends likely to cause drastic changes for the asset management industry: a shift from asset accumulation to distribution, ultimately reaching $41 trillion; under-funding of retirement and medical obligations; sub-standard savings rates; potential government intervention and innovations in portfolio management methods.
The goal of the center will be to dissipate some of "the clouds on the horizon," says Bacon, a task for which it is well-suited: He notes recent Financial Times global rankings that place the CSOM Finance Department seventh among the world's top 100 finance accounting programs.
The center is the creation of CSOM Dean Andrew Boynton and Finance Department chairman Prof. Hassan Tehranian, who were seeking opportunities for the school's skilled academic researchers to collaborate with asset management practitioners.
Boynton predicts the new center will produce both workable solutions for the industry and an enhanced educational opportunity for Boston College faculty and students. "The finance department here has a terrific track record in working with executives," he said. "The faculty is 'world class' in terms of research and teaching. We have approximately 750 undergraduates majoring in finance and a large part of our full-time MBA student population focuses on finance.
"This means that we have students who will help do some of the research and this is going to help get our students placed," Boynton added.
"The center will help to attract even better faculty and the students will have a better experience in the classroom. It's a very mutually reinforcing cycle."
Tehranian said, "My job is to support faculty excellence in finance research and work with Jim to leverage that excellence through the center. It's amazing to see the topics that these people have been working on. I would like to use this, plus pull in leadership from other centers at Boston College and outside of Boston College.
"This will be a hub for that research."
Boynton cites Boston as one of the world's leading cities for asset management, with more than 200 local firms controlling assets exceeding $6 trillion - more than a quarter of the nation's total. Some 15,000 people are employed in the asset management business in Boston, a figure that does not include those employed in the field by local banks and insurance companies.
"Boston is arguably the asset management center of the world," he said. "These firms also hire our students, they are interested in the research we are doing and they network with our faculty. Jim knows this and that's why we have him on board."
More information on the Center for Asset Management is available via the center Web site at www.bc.edu/schools/csom/asset/.