Where Do Asset Managers Make the Least Money?

One region’s asset managers are trailing the global average when it comes to income.

UK asset managers are trailing their global counterparts in money-making, as the median publically traded firm saw a 13% uplift in revenues last year, research has shown.

While firms in the US, Canada, and Australia saw double-digit revenue increases in 2014, their UK counterparts’ income grew by an average 3%, according to consultant Casey Quirk. Some 40% of publically-quoted, UK-based firms suffered revenue declines.

“Many UK firms remain aligned with slower-growth buyer segments and geographic regions,” said Jeffrey Levi, partner at Casey Quirk, and head of the firm’s Knowledge Center.

“Many UK firms remain aligned with slower growth buyer segments and geographic regions.” —Jeffrey LeviLevi accused firms of not being “sufficiently aggressive” at building new active and innovative beta capabilities or repositioning against higher-growth markets, creating headwinds in firm growth. UK groups have also been grappling with new rules regarding retail distribution, and a shake-up in the at-retirement market coming into effect from this month.

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“That being said,” Levi added, “we are seeing some UK firms making significant investments to take advantage of key opportunities.”

Casey Quirk studied public documents submitted by 62 quoted managers from around the world, which look after a total of $14.3 trillion. While 76% reported increases in their assets under management, just under a quarter suffered net outflows in 2014.

The consultant found net new flows into alternatives outstripped those into traditional asset classes for the fifth consecutive year.

However, Levi said continued upwards movement was not a foregone conclusion.

“Managers are being challenged by both buyers and shareholders in a lower growth environment,” he said. “Buyers want highly tailored outcome-oriented solutions while shareholders want to see significant cash flow generation through more scalable offerings. Product development and delivering a distinctive client experience will be critical for success.”

This week, consultant LCP reported some fees charged by asset managers in the UK had risen by 60%, while the cost of some asset class mandates had fallen.

Related Content: The Fees Conundrum: Prices Rising… and Falling &  Asset Managers Cut Back to Maintain Revenue Growth

Albourne CEO to Step Aside

An Albourne co-founder and one of CIO’s 25 Knowledge Brokers is to stand down in August.

Ruddick_SimonSimon Ruddick, AlbourneSimon Ruddick, one of the founders of investment consultant Albourne Partners, is to step back from his role as CEO in August, the company has announced.

Ruddick, who launched the company in 1994, is to pass the baton to John Claisse on August 11, but remain on the three-person executive committee alongside him and Guy Ingram for a further five years. He will also continue to serve as the chairman of Albourne’s board of directors, the company confirmed.

Calling Claisse an “extraordinary colleague and very dear friend,” Ruddick said: “John is completing the journey of the intern who had to build his flat-packed desk on his first day of work to managing a firm with a global footprint and very big dreams of how it can help its clients and try to improve the efficacy and efficiency of those markets that it is involved with.”

Albourne was placed third by last year’s Forty Under Forty cohort in a ranking of their top consulting firms. The firm works with clients exclusively on alternative assets: hedge funds, private equity, real assets, and real estate. 

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The outgoing CEO created Albourne after trying various areas of the financial sector. In 2012, as part of CIO’s 25 Knowledge Brokers series, Ruddick said he had a dream to “make money alongside—rather than from—clients”.

He first tried investment banking, then launched a hedge fund. But neither was the right fit. “The hedge fund was a good first step,” he told CIO in 2012. “But you have to stick with what you are doing. You are a ‘diversifee’ rather than a ‘diversifier,’ so you get stuck in a box.”

The final attempt was to create Albourne, a pure-play investment advisory that charges a flat fee regardless of client size and does not negotiate supplier discounts. Large clients get “outrageous value,” according to Ruddick, while the smaller ones can access the top-quality funds and research usually reserved for the biggest and richest investors.

The company has grown to serve 262 clients, which hold more than $350 billion in alternative assets, from 12 office locations. The company has also been nominated for several CIO Industry and European Innovation Awards.

Related content: Knowledge Brokers 2014 – Simon Ruddick & A Look at Young Talent in the Consulting World

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