A survey by consulting firm Casey Quirk of 18 publicly listed asset management firms representing $21 trillion in assets under management found that while these firms had record earnings in the period between the second quarter of 2023 through the second quarter of 2024, a wide disparity exists between the best- and worst-performing firms.
According to the report, the asset management firms experienced the following growth during the period:
- Median revenue: 6%;
- Operating expense: 4%;
- Median margin: 3%; and
- Compensation: 1%.
“Managers across the industry have continued to see consistent growth, with revenue increases over the past year arriving at all-time highs,” said Amanda Nelson, a principal in Casey Quirk, which was acquired by Deloitte earlier this year, in a statement. “With broad financial stability came the opportunity for expansion and development, as we saw an increased pace in non-compensation spending among asset managers, in part reflecting increased acquisition activity and a growing investment in technology driven in part by AI interest.”
Many managers, Nelson says, have acquired teams and firms that are focused on private markets capabilities. These funds are also making inv
What separated the best- and worst-performing firms were the firms’ level of exposure to private markets. Firms that earned more revenue from private market assets were among the best performers, according to Casey Quirk. These firms were followed by those that derived more revenue from equity and index providers.
Across the survey, asset managers reported the following metrics:
- Revenue growth ranged from –1% to 11%;
- Operating expense growth ranged from –5% to 9%; and
- Margin growth ranged from 0% to 6%.
“It’s not a new phenomenon for a small set of firms to capture a majority of the flows, but this disparity highlights which categories of firms are thriving in the current environment—most notably, private markets managers,” said Tyler Cloherty, managing director at Casey Quirk, in a statement. “As private markets continue proving to be a strong source of revenue growth, traditional asset managers will likely intensify their ambitions to expand into the private space.”
Fund inflows across the board have been modest, Nelson says, with inflows primarily going into money markets fixed income and passive strategies. The firm also sees growth in non-mutual fund vehicles like ETFs and SMAs and additional growth in private markets, although Nelson note that fundraising has been much more episodic.
Institutional investors have poured into alternative investments over the past decade, and the asset class has been a consistent provider of long-term outperformance. Private credit has been the focus of investors for the past few years.
At a conference last week, JPMorganChase CEO Jamie Dimon criticized investors’ focus on private markets, citing the decline in the number of public companies over the past two decades and its impact on a “lack of transparency and liquidity and research.”
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Tags: Amanda Nelson, Asset Managers, Casey Quirk, Deloitte, Tyler Cloherty