New active strategies winner for asset management
Global assets under management rose 10.5 per cent in 2014 to US$67 trillion ($90.5 trillion) with the most successful firms using focused new active strategies, according to a benchmarking survey.
The 2015 Performance Intelligence asset management benchmarking survey found robust capital markets powered revenue and profit margin expansion last year. Industry revenue, however, rose only 6.3 per cent to an estimated US$317 billion, as aggregate average fees declined by 0.48 per cent in 2014.
The survey said while the industry is health, with 34 per cent profit margins, the highest in the past five years, it is facing increasing fee stress as investors tilt to passive strategies and from distributors taking revenue share from managers.
Partner at management consulting firm, Casey, Quirk & Associates, Jeffrey Levi, said traditional active, benchmark-orientated investment managers are increasingly being challenged.
"Winning firms will include those that can become product innovators, developing benchmark-agnostic, high-conviction new active strategies, outcome-oriented solutions providers and/or cost-effective beta providers, and are able to penetrate and grow share in the retail marketplace," he said.
The survey said the four winning operating models separating from the rest of the asset management industry are:
- Focused new active;
- Scale beta;
- Global broad capability; and
- Channel leader
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