Asset management growth has “stalled” to 2008 levels, new report finds
The global growth of asset management "stalled" in 2015, marking its worst year since the 2008 financial crisis, a new report has found.
Growth in assets under management (AUM) rose by one per cent globally to $71.4 trillion (£55 trillion), from $70.5 trillion. The figure grew by eight per cent in 2014 and averaged five per cent growth between 2008 and 2014.
The Boston Consulting Group’s (BCG) Global Asset Management 2016 report also found net new flows of assets, revenue growth and revenue margins all dropped lower in 2015.
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AUM growth in the UK was slower than the global average at 0.4 per cent. And, in contrast to the eight per cent global growth in 2014, the UK was down one per cent.
“The big implication is that when AUM growth doesn’t rise as much as firms were expecting, that puts quite a big pressure on costs,” BCG’s Dean Frankle told CityAM
“And already firms, especially in the UK… were already starting to focus more on costs, seeing pricing pressure. So it adds just another constraint that they’ve got to deal with.”
He suggested that the Brexit vote creates more uncertainty in the UK market and so growth could potentially slow further in 2016.
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Brent Beardsley, a BCG senior partner based in Chicago, the global leader of the firm’s wealth and asset management segment, said: “Weak and turbulent global financial markets are today’s reality – one recent example being the market response to Britain’s ‘Brexit’ vote to leave the EU.
“Asset managers that depend on financial-market performance to drive increases in asset values are stuck in a model from the past.”