Amazon.com Inc. (AMZN) & Facebook Inc. (FB) As Potential Investment Managers

In a recent live interview from Monaco with CNBC, Tom Brown, who is the global head of investment funds at KPMG, shares his thoughts about how technology companies like Facebook Inc. (NASDAQ:FB), Amazon.com Inc. (NASDAQ:AMZN), Google Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), etc. could make their entry into a completely different industry of financial services.

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He said:

“Our lives are all changed by use of tablets and mobiles. We expect to organize our lives on these things.”

He also gave an example of how Alibaba.com has launched a funds platform in China and have succeeded in taking funds worth billions onto their platform.

Brown added

“We can expect companies like Amazon, Google, Apple, to be thinking about financial services and thinking about investment management.”

On being asked about the feasibility of replication of Amazon.com Inc. (NASDAQ:AMZN)’s China strategy by U.S. companies like Amazon.com Inc. (NASDAQ:AMZN), Google Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), in a more developed market like the U.S., Brown said, “I think there is a brand issue around some of these companies, there is a high degree of trust in some of these big technology companies that maybe the financial services hasn’t got.”

According to Brown, the combination of financial services and trusted brands like Amazon.com Inc. (NASDAQ:AMZN), Google Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), etc., which can get people to interact and organize their lives around the company’s services and devices, would be a very powerful combination.

On the question as to how should fund managers target clients in such a changing industry, with a diverse client base and shrinking margins, Brown replied:

“The future is very different. Generation X, generation Y are going to expect very different ways of dealing with their financial services providers.”

Brown said that it was necessary for fund managers to embrace new technology and also to focus on developing markets, like Indonesia, Mexico, China, etc. He added that even though banks have expanded into developing countries, they still need to tap the savings and investments available over there.

Tybourne Capital Management, run by Eashwar Krishnan raised its stake in Amazon.com Inc. (NASDAQ:AMZN) by 72% in the first quarter to 448,325 shares. Christopher Lyle‘s Scge Management also upped its stake by 70% during the same period to 170,000 shares.

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