While benchmarking of IT systems is already firmly on the agenda for the Bank and the Treasury, there remains suspicion that institutions must do more to ramp up their security measures – and savvy investors could be among the beneficiaries.
In the wake of high-profile attacks on Sony and Talk Talk, investors are already looking to those firms that can guard against future breaches. Indeed, it is estimated the US alone now spends some $12bn (£8bn) a year on cyber-security.
In June last year, software company McAfee estimated the annual cost of cyber-crime to the global economy at more than $400bn – more than the national income of most countries.
“As Google and Facebook rush to make the internet accessible for every human on earth, over the next 10 years the opportunity for cyber-security will be unrivalled,” says Ashley Owen, head of investment strategies at AES International.
“Companies and government will have no choice but to allocate higher budgets to cyber-security both by hiring external organisations and by having in-house defences.”
With this in mind, Owen points to asset managers that have been buying into this trend. In particular, he picks out the €4.1bn (£2.9bn) Pictet Megatrends Selection Sicav, managed by Hans Peter Portner, who has also identified increased and tighter regulation as a further incentive for rising spend by companies on cyber-security.
The same asset manager also runs another vehicle specifically focused on the security industry, the €995m Pictet Security fund, which has one-third of its assets in companies fighting against cyber-crime.
Managed by Yves Kramer and Frédéric Dupraz, this fund has had a shaky few months, but long-term performance is encouraging.
