A transformation is taking place in the five-year performance track records of countless investment funds and strategies as this year fades out and the impact of the market collapse of late 2008 is erased.

While the EU’s AIFMD has had a marginal impact, asset managers have largely escaped the scrutiny of the regulators, legislators and policy makers.

As the reform agenda of the 2009 G8 meeting has fed through the Washington and Brussels legislative machines, and Basel IV is taking shape, the focus has largely remained on the banking system. Variously touching on remuneration and banking capital adequacy, as well as other matters, these initiatives have spawned a welcome debate on the nature and utility of banking in society.

This has been particularly appropriate as recession in Europe has placed the focus on the primary activity of banks for society, the supply of credit to the real economy.

But asset managers cannot hope that scrutiny of their business activities will fade as fast as the impact of Lehman from their track records. A report of the US Office for Financial Research (OFR), commissioned by the Financial Stability Oversight Council (FSOC) and published this autumn, analysed whether the activities of the largest asset managers might introduce vulnerabilities into the financial system.

In other words, should the BlackRocks, Vanguards, SSGAs and Fidelities of this world join GE, AIG and Prudential Financial in the ranks of systemically relevant organisations, and should they be subject to “enhanced prudential standards and supervision” under the Dodd-Frank Act?

The asset management industry may have thought it was self evident that, as agents, asset managers do not represent a systemic risk or transmit systemic risks to the financial markets.

Indeed, some of the claims in the OFR report are dubious. While asset managers may “reach for yield”, the report does not offer evidence that asset managers breach clients’ investment guidelines. Any herding is at the behest of investors and ETFs do not transmit or amplify shocks any more than direct traders in the markets.

The issue of re-investment of collateral in securities lending programmes has been a key subject of discussion by institutional investors and in many cases resolved by them as beneficial owners of the underlying assets.

So far, there is no suggestion that the OFR report is anything more than a discussion paper. While it touches on some areas of stress within the asset management value chain, it presents no evidence that these are caused by asset managers or transmitted by them.

The Investment Company Institute claims the report has made an assumption about asset managers and hypothesised scenarios in which this might be so. But the OFR report points to wide data gaps involving the activities of asset managers, particularly those, such as Fidelity, that are held privately. The industry might reasonably expect more scrutiny.

Unfortunately, experience with the various post-crisis regulatory and legislative initiatives is that ideas rarely go away once they have got themselves under the institutional skin of whichever body is involved.

Will European authorities now seek to investigate asset managers? Asset managers should prepare themselves for similar scrutiny, regardless of the eventual conclusions or action. Representative groups like EFAMA should prepare themselves but anyone charged with undertaking a similar exercise should seek adequate information from the outset and not look for evidence to suit preconceptions.