On a global level, 45 percent of assets are offshore compared to 55 percent which are managed locally.

There are huge amounts of wealth creation, especially given the disproportionate growth of those markets relative to the developed world.

It's about capturing a share of the future.

It's interesting that Swiss banks also hide their assets from the Swiss by using offshore bank structuring.

We got a bigger-than-expected decline because offshore production is still down by more than 50 percent and imports were down. The shock of Katrina is still being felt.

As hedge funds become more institutional, and we predict that eventually 85 percent of assets will come from institutions, there will be downward pressure on fees. We just aren't seeing it yet.