The investment management industry proved resilient in the 10 years since the terrorist attacks of Sept. 11, 2001, even though things can never be the same.
Even some of the money management firms hardest hit have survived and thrived.
Among them, Fiduciary Trust Co. International and Fred Alger Management Inc., decimated by the loss of 97 and 35 employees, respectively, when their World Trade Center offices were destroyed, will commemorate their lost colleagues for the 10th anniversary of the 9/11 attacks. (See page 3 for stories about each firm.)
Still, the money management industry didn't emerge unscathed from the tragedy: The attacks left a sense of vulnerability as a permanent and ugly scar, and forever changed the way the world thinks about investments.
“9/11 fundamentally changed the world's confidence that we're always on firm footing and that we will get through any crisis,” said J. Tomilson Hill, president and CEO of Blackstone Alternative Asset Management, New York.
“Before the attacks in 2001, there was a sense that governments, including the central banks, would always be able to figure out a solution to any problem. But we came very close to having the whole global banking system — the lifeblood of the global economy — close down. 9/11 contributed to the sense that the institutions we rely on are not always in control and that sense of vulnerability affects everything — markets, financial institutions, personal decisions,” Mr. Hill said.
That sense of vulnerability dramatically changed the perspective of market participants, sources said.
“There's no doubt that (9/11) had an indelible impact in terms of changing the way that we look at the world” and think about the connections that a more global environment has created in the 10 years since the terrorist attack, said Andrew W. Lo, a finance professor at the Massachusetts Institute of Technology and chairman and chief investment strategist of hedge fund manager AlphaSimplex Group, Boston.
While 9/11 wasn't the first incident that sparked a far-reaching flight to quality, it did mark “a coming of age of the kind of global integration that we now take for granted,” said Mr. Lo.
Since 9/11 there have been a number of instances in which “multiple asset classes became locked in correlation,” and that has “changed the way we think about risk management and investments,” he said.