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© Nathan
Mandell
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As seen from closest: Carter Smith, Managing Director, Banc of America Securities IB
Greg Jania, Senior Vice President, GE Commercial Finance
Riz Hussain, Vice President, Morgan Stanley Credit Strategy
Mark Sellers, Senior Analyst, Morningstar |
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To restore public confidence, he said, corporate and financial
institutions need to implement in-house review programs that
go above and beyond what is required by the Sarbanes-Oxley
Act. Dollive said Kraft has spent $10 billion in compliance
fees.
Fisher Scientific, a much smaller company
that sells specialized measurement and flow control equipment
for laboratories and
industrial markets, spent the same amount on compliance,
said Frank Harter, the firm’s vice president of finance.
Even with the regulatory restrictions imposed by Sarbanes-Oxley,
he predicted that “25 percent of companies still won’t
have clean financial statements,” because of the time
involved in bookkeeping. Harter said 40 percent of his time
is now spent managing compliance issues.
In discussing some of the ramifications of
the volatile market on consumers, Peter Jankovskis, director
of research
for Oakbrook Investments, said he has been focusing on risk
control. “We keep the same mechanics, but talk more
to clients about their needs,” he said. He foresees
a strong market within one year’s time.
In uncertain times, fixed-income returns
traditionally do well, said John Didrickson ’01, vice president, Morgan
Stanley Fixed Income, who predicted baby boomers will pursue
that investment route. Hedge funds already are a fast-growing
sector, said Joseph Nicholas, founder and chairman of Hedge
Fund Research, and a graduate of Northwestern’s School
of Law.
To attract even more clients, the hedge fund
industry must provide a broader base of investments and
do a better job
of educating the public. “Many consumers don’t
realize that the return is in the marketplace, not in the
manager,” said Nicholas, providing one example of a
common misconception. “But you do need a talented manager
to tap into the marketplace."
Mitchell
A. Petersen, the Glen Vasel Associate
Professor of Finance at Kellogg, said the conference was
an opportunity
to highlight the finance knowledge of the school’s
current students and alumni.
“The panelists stressed the importance of building a strong
foundation in finance before leaving Kellogg,” said
Petersen. “Knowledge of analytic finance skills,
such as portfolio theory, option pricing and security analysis,
provides our alumni with the skills to confront an uncertain
world.”
In addition to the Kellogg School, the conference was sponsored
by Banc of America Securities, Baird, Citigroup, Goldman
Sachs, Merrill Lynch, Target and Union Pacific.
