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The Wall Street Transcript has just published its Financial Services & Regional Bank Roundup offering a timely review of the sector to serious investors and industry executives.

The following is a brief excerpt from the Financial Services and Regional Bank Roundup Report, in which Michael Kim, an Associate Director in the research department of Sandler O’Neill + Partners, L.P., was interviewed:

What level of organic growth do you expect to see out of your group over the next 12 months? What will be the key drivers behind that growth?

Mr. Kim: I think that organic growth is going to be relatively subdued for the next couple of quarters, as market volatility remains elevated. I think both the retail and institutional investors are still somewhat risk averse, just given the market environment that we’ve seen more recently, with fixed income strategies garnering most of the flows. So if I had to put a number on it, I think industry organic growth of something in the low-single-digit percentage range for the next couple of quarters is not unreasonable, and then building back up to something in the mid-single-digit range beyond that. Over time, I still think we are going to see investors re-risk their portfolios and step back into higher-return equities and alternatives once the broader markets stabilize. Keep in mind, many pension plans are still well underfunded today. Also with the Baby Boomers’ fast-approaching retirement, I think a lot of investors are going to need to reallocate into riskier assets in order to rebuild their portfolios.

You have “buy” ratings on Invesco (IVZ), Affiliated (AMG) and Waddell & Reed (WDR). What do you like about these companies in comparison to other asset managers?

Mr. Kim: I would say the common theme among them is fundamental advantages, whether it’s scale, diversification, investment performance and/or profitability. So as I look at our “buy”-rated stocks, I think you are likely going to see some combination of those factors at play, driving higher sustainable growth rates. A good barometer that we focus on when analyzing these companies is the mix of each firm’s underlying assets under management. So the firms that have greater exposure to higher-growth markets, such as the institutional channel or maybe strong distribution capabilities outside of the U.S., seem better positioned to grow faster versus their peers. Companies that have first-mover advantages or have a differentiated value proposition are likely going to continue to take market share and therefore generate higher growth rates relative to some of the firms that are less differentiated.

The Wall Street Transcript feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.