Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:McKinsey: Margins are Back Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, December 19, 2014

McKinsey: Margins are Back

Reported by Sean Hanna, Editor in Chief

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.  

    Stay ahead of the news ... Sign up for our email alerts now
    CLICK HERE

  • 0.0
     Do You Recommend This Story?



    GO TO: MFWire
    Return to Top
     News Archives
    2018: Q4Q3Q2Q1
    2017: Q4Q3Q2Q1
    2016: Q4Q3Q2Q1
    2015: Q4Q3Q2Q1
    2014: Q4Q3Q2Q1
    2013: Q4Q3Q2Q1
    2012: Q4Q3Q2Q1
    2011: Q4Q3Q2Q1
    2010: Q4Q3Q2Q1
    2009: Q4Q3Q2Q1
    2008: Q4Q3Q2Q1
    2007: Q4Q3Q2Q1
    2006: Q4Q3Q2Q1
    2005: Q4Q3Q2Q1
    2004: Q4Q3Q2Q1
    2003: Q4Q3Q2Q1
    2002: Q4Q3Q2Q1
     Subscribe via RSS:
    Raw XML
    Add to My Yahoo!
    follow us in feedly




    ©All rights reserved to InvestmentWires, Inc. 1997-2018
    14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
    Privacy Policy :: Terms of Use