Fund management businesses owned by investment banks have been losing their grip on client assets over the past decade, according to figures from the UK’s Investment Management Association (IMA).
Figures in the organisation’s annual asset management survey showed the investment banks that looked after 18% of all UK clients’ money in 2003, were responsible for just 11% of it last year.
“What we now see emerging is a far more independent asset management industry,” said the Investment Management Association. Retail banks have also lost ground, moving from 19% to 5% in the same period. Several large players in this sector either collapsed during the financial crisis or were forced to curtail their fund management operations.
“What we now see emerging is a far more independent asset management industry, less characterised than it has been in the past by large in-house investment management companies owned by banks and insurance companies,” the IMA’s survey said.
The main drivers to this have been a structural shift relating to “the changing nature of the asset management industry, which is now much more clearly defined as a discipline in its own right, as opposed to a port of another financial services set,” along with some companies backing away from non-core functions after the crisis, the IMA said,.
Some investment banks have cut their fund management ties—Barclays sold its BGI business to BlackRock, for example—whereas others have ceased to exist. This has reduced the number of Wall Street players, who may have taken up the slack of their peers.
In 2003, Goldman Sachs reported global assets under management of $373 billion, whereas Morgan Stanley said it had $462 billion. By 2013, Goldman Sachs Asset Management oversaw $1 trillion from global investors, with Morgan Stanley only looking after $373 billion—but with a further $692 billion from wealth clients taking it past the $1 trillion mark. The banks saw their global client assets rise 168% and 116% respectively, while the IMA said UK-managed assets rose 127% in the same period.
Independent fund managers and those categorised as “others”, which includes custodian banks, have seen their share of client assets rise over the past decade, from 15% to 37% and 6% to 15% respectively.
By way of an example, in the decade to 2013, Northern Trust’s global assets under management rose 193% from $302 billion (before the purchase of Deutsche Bank’s passive business) to $884 billion, while BNP Paribas’ asset management arm saw its client money increase 191% from €127 billion to €370 billion, according to their annual reports.
The full IMA survey can be found on the organisation’s website.
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