LEWIS RANIERI VICE CHAIRMAN, HYPERION CAPITAL MANAGEMENT INC.

Lew Ranieri developed the mortgage-based securities market while a bond trader at Salomon Brothers Inc. during the late 1970s and the 1980s. At 52, he’s looking ahead – and the Internet scares him.

“When the United States was young and they connected the two coasts with a telegraph, it was a remarkable technological breakthrough. We’re at the beginning of a revolution like that with the whole restructuring of financial services. If I were able to be in the beginning of my career, I hope I would be a thinker and a shaper. I have always been involved in the broad spectrum of institutions and assets.

“What intrigues me is the balance between electronic commerce and traditional methods. There’s no question about the power of the new technology, but we’re only seeing one side of a double-edged sword. We see the convenience, content and cost savings that cyberspace gives you, but what is the price? Loss of individuality and physical contact.

“The last time we had a recession, people had a little credit, most owned their car and they were trying to pay off their mortgage. Now, there’s much more leverage in the system.

“How will this dispassionate, Orwellian machine we are building treat everyone in the lean years? The financial services structure we are carrying into those years has never existed. It’s a culture that has never been tested.

“We are, at the same time, physical and intellectual beings. There’s a great appeal for us in cyberspace, but there is a great appeal for us as individuals as well. That’s the balance that must be struck. Our essential humanness is what is at risk here.”

Linda Sakelaris

George F. Russell Jr.

Chairman, Frank Russell Co.

The pension plan is dead, headed the way of the dodo, predicts the 66-year-old who created investment management consulting and pigeonholed money managers into the classifications that pros rely on today.

“In the future, there will be no more defined benefit plans – that will occur well before the next 100 years. All the plans will be defined contribution.

“The trend of corporations stepping away from taking accountability for performance of pension funds will continue. Everyone in the world will have to be his own CFO. That means there needs to be an enormous amount of education for at least 90% of the people around the world.

“You will see the development by the mutual fund industry of a host of tax-sensitive, tax-friendly investments.

“In 100 years, there will be 10 billion people in the world – there are 6 billion now – and it will be an amazing and enormous challenge to get people out of poverty.”

The only way the 21st century will be a safer place for human beings… will be if some form of democracy – not necessarily our form – and some form of market economy are adopted around the world to narrow the gap between the haves and have-nots.”

Barry B. Burr

Alan Patricof

Chairman, Patricof & Co. Ventures Inc.

His 30-year-old private investment firm has helped seed some start-ups you might have heard of: Apple Computer and Office Depot, to name two.

Today, Mr. Patricof, 64, oversees $5.5 billion under management -$1.2 billion in the United States.

“There’s been enormous changes in the internal structures of Japan. The banking system is being expunged and cleaned up. Employment, securities and registration laws are changing. The country is opening up to become a more entrepreneurial, competitive environment. We’ll look back on this time and say this was a major opportunity sitting right at our doorstep.

“But Japan is an opportunistic play. The only place I feel safe over the long term is home. Sooner or later you come back to the U.S. We still have the greatest depth in markets and enormous opportunity.

“The Internet’s impact in financial services is immediate distribution. We’ve already seen dissemination of business plans and solicitations that might have come in through the mail before. The dissemination of secure documents over the Internet will have a profound effect on the more formal side of the financial services business: loan syndication, private placements, red herrings and prospectuses.

“Two years ago there was no electronic dissemination of documentation for loan syndication. Now perhaps a half dozen major banks have gone to 100% electronic distribution of documents. That will affect lawyers, accountants, investors and investment bankers.

“If it sweeps into the public offering of prospectuses, it will change the whole nature of the business. I don’t know if companies like Bowne & Co. and R.R. Donnelley & Sons Co. are sitting around shivering, but they are certainly focusing on what implications that’s going to have.

“Electronic trading networks are evolving that give people the ability to trade directly with each other. They are going to narrow spreads and create threats to the major trading networks. The Nasdaq, the American Stock Exchange and the New York Stock Exchange are going to have to deal with electronic trading. Who knows whether the exchanges will become an anachronism? The Internet or something akin to that may fulfill the function more efficiently.

“I don’t think it is there yet, but it is certainly a possibility in the future – just like shopping centers and department stores have to be concerned about becoming redundant.

“We are clearly in a phase of enormous consolidation. The trend toward mergers is unlike anything I’ve seen in the last 30 years, and I don’t see this trend abating. In Europe you will see massive consolidation. Traditionally what’s happened is 10 years from now they will start disassembling. History would say it’s tough to assimilate the Romes of the world. People have their eyes open when they make these acquisitions.”

Michael Fritz