Equity bounce missed
A study of which asset classes were most lucrative in 2007 revealed that most
investment managers missed out on equity opportunities, but rated residential
property more highly. According to Santander Asset Management, just 9% of
respondents thought equities had provided best returns over the year, whereas
33% rated residential property. Cash products and gilts followed closely.
Corporate bonds and commercial property lost investors the most cash for the
period – while the report found 43% of respondents didn’t know which class had
performed the best.
Fraud hit a 12-year high in 2007 driven by good old management book-cooking,
with employees beginning to get the hang of their bosses’ style. More than £1bn
worth of fraud cases went to court – the highest value since 1995, according to
KPMG’s Forensic Fraud Barometer – as manager-perpetrated fraud cost £54m and
staff fraud £27m last year. KPMG partner Hitesh Patel said that levels of fraud
remained “disturbingly high” and helpfully suggested businesses to “be
IHT leads reform talk
Inheritance tax is seen as the top priority for tax reform for Gordon Brown’s
government, according to accountancy firm MacIntyre Hudson which polled their
clients and found around 82% putting IHT first in their concerns. Brown’s
proposals to allow married couples a total IHT allowance of £600,000 were well
received, while newer suggestions include stamp duty exemption for first-time
house buyers to the value of £250,000, and a law forcing private equity firms to
pay more tax. MacIntyre Hudson also found a lack of support for the proposed
capital gains tax rate hike to 18%.
Despite the credit crunch and general misery, banking and finance professionals
say they are happy in their work and don’t want to change jobs. According to
Badenock & Clark’s Happiness at Work index, only 18% of people surveyed in
the banking and finance industries – and 24% of accountancy staff – are unhappy
at work and hope to make a change in 2008. Around 30% of individuals in the
combined banking and finance sectors are not worried about the effects of the
credit crunch and are confident about job prospects at the beginning of this
year than the same time last year.
First 100 daze
The well-worn argument that most M&A deals fail has been re-opened with new
findings from Hay Group. In its study of M&A integration it found that 91%
of deals fail to deliver on their original objectives because acquiring
companies took an average 74 days to appoint new management teams for their
targets, creating a leadership void that has a knock-on effect to frontline
operations for the following 30 months.