Profits are back. That is the positive news from McKinsey's latest report on the state of the $30 trillion asset management industry. Yet, the consulting firm warns that organic growth is slowing. That could leave mutual fund firms dependent on the markets, rather than marketing for their business' success.

The research covers key industry benchmarks through the end of 2013.

The consulting firm did find one bright spot in the U.S. in the defined contribution space.

Across the entire industry, profits jumped 30 percent in 2013 to $34 billion. That is 18 percent more on the bottom line than in 2007. Average pre-tax margins of North American asset managers reached 32 percent, just below their peak levels of 33 percent in 2007 and well above the low of 22 percent in 2009.

Firms have also seen net revenues expend. That figure is now 50 basis points, three bps higher than in 2007. Net revenues remove distribution and fund waiver expenses.

Despite the strong bottom line, McKinsey consultants point to slower organic growth. Since 2012 net flows have been just one percent in the U.S.

That slow growth has left some firms lagging "far behind the rest of the industry," thought the report did not name names.

Which products are benefiting should surprise no one who has been paying attention. The four drivers are:

Passive strategies and ETFs

Active specialties

Multi-asset class strategies

Alternatives

Meanhwile traditional asset classes (domestic equity, core/core plus fixed income and money market) still accounted for 35 percent of assets under management in 2013 even after negative net flows of 28 percent.  

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