The global asset management industry is back to its pre-crisis peak, managing $74 trillion.
Profits for money managers were up $102 billion, hitting 2007 numbers, the Boston Consulting Group found in its annual survey. But, pressures on fees and the rise of index funds kept net revenue growth low, reports the Financial Times. Much of the profit growth comes from fees on growing assets, not new assets coming in. Net new assets were the same in 2014 and 2013. Writes the FT:
“Professional asset management ranks among the world’s most profitable businesses, and it’s a growing one for managers that get it right,” BCG says in its 13th annual report on the industry.
The industry’s cost base is up 44% since 2007, reports McKinsey. The asset management industry has been forced to change, with the biggest players becoming bigger. The top 10 U.S. managers had 68% of the inflows in 2014, compared with 53% in 2013. The largest passive managers, including Vanguard, are benefiting the most as investors turn to cheaper index products.
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