Capital Markets Key Facts 2012

Capital markets makes up 11 percent of the financial services sector by market capitalization. From the traditional advisory role of investment banks in mergers and acquisitions to its role as revenue generator through sales and trading, capital markets encompasses a broad range of activities.

In this paper, Accenture answers basic questions about the current capital markets industry, addressing the size and value of volume of the global industry. It also examines key performance indicators of investment banks—their operational metrics—and the size and outlook for IT spending. Read it to learn the 10 key findings that all capital markets players should know about their industry.

• How large are these markets?
• Which products and offerings are most important?
• How has the credit crisis affected the size of the financial industry?
• What is the volume of trading?
• What metrics can we use to identify top performers?

Part 1: Market size

1. Global equity market capitalization peaked at $62.5 trillion in August 2007, fell to $26.5 trillion by mid-2008 and has since recovered to $46 trillion.

2. In 2011, mergers and acquisitions were down, and the number of global initial public offerings (IPOs) fell by 61 percent.

3. The size of the combined domestic and international bond market has passed $97.5 trillion.

4. In 2010, there were approximately 18 billion share trades for a total value of $82.5 trillion—the equivalent of 177 percent global market capitalization.

5. Turnover of exchange-traded derivates fell to $417 trillion in 2011, while the notional amount of over-the-counter (OTC) contracts is more than $605 trillion.

6. Institutional asset managers manage 60 percent of all global financial wealth, with pension funds controlling a quarter of global assets under management.

7. The assets of rich individuals continue to accumulate. There are over 1200 billionaires in the world, with a combined wealth of $4.5 trillion.

Part 2: Operational Metrics

8. In 2011, an average employee at an investment bank generated $880,000 and ran up costs of $620,000. While staff pay decreased in 2011, it remains about 2007 levels.

9. In 2011, on average, an employee of an asset manager generated $660,000 in revenue and $490,000 in costs.

Part 3: IT Spending

10. In 2012, capital markets firms will spend around $79.5 billion on IT and IT services, with sell-side firms dominating with an estimated spend of $63 billion this year.