UNC Kenan-Flagler Business School


Economic analysis of N.C. investment management industry is focus of study


An economic analysis of the investment management industry in North Carolina is the subject of a study from the University of North Carolina Kenan-Flagler Business School.

“The investment management Industry in North Carolina is large and growing,” said UNC Kenan-Flagler finance professor Gregory W. Brown. “It accounts for 2‐3 percent of state employment, income and output.”

The goal of our report is to understand the North Carolina businesses that provide investment management services, Brown said. “We wanted to understand the characteristics of businesses and their employees, their economic impact, and their attitudes towards doing business in North Carolina.”

Conducted by Center for Excellence at Investment at UNC Kenan-Flagler, the report includes four parts:
• Reviews employment statistics for specific jobs in the investment management industry
• Considers the size and economic impact of the industry in North Carolina
• Reports results of a survey of N.C. investment management businesses
• Suggests strategies that could help support and grow the industry in North Carolina

The study found that employment of investment professionals has grown 26 percent over the last seven years, and professionals are very optimistic about growth prospects for the next three years.

It also found that wages for investment professionals are more than three times the state’s average wage, but lag the national industry average by 41 percent. At least part of the wage difference is due to the lower cost of living in North Carolina relative to other major financial centers. “North Carolina should use this cost advantage as part of an effort to attract investment management firms seeking to expand or relocate operations,” Brown said.

Survey respondents saw opportunities for policies that promote growth of the industry, which appears to be especially sensitive to existing and proposed tax policy. Several suggested that the state could use its financial resources to help stimulate the investment industry through an economic development program.

“And even though the industry is thriving, businesses cited few economic reasons for their location in North Carolina,” said Brown. “Most cited the reasons for their location as already residing in here and the quality of life. Given states’ efforts to attract high value‐added businesses, North Carolina should consider seeking a broader range of benefits for firms operating here.”

To read the full report, go to https://areas.kenan-flagler.unc.edu/finance/sites/finance/files/2016-11/IMinNC.pdf