Profit margins of asset managers under pressure -report

A report from a survey of money managers worldwide found that profit margins are at risk as the industry faces headwinds from choppy capital markets and tepid revenue growth in traditional asset categories.

Operating margins in the global asset management industry have recovered from their 2009 lows, at a median 32% in 2011, but they remain below pre-crisis levels, according to the survey of 96 money managers overseeing some $21trn in assets.

Profit margins have been managed by controlling compensation and benefits expense, the survey found, but keeping the lid on costs will not sustain current profit margins into the future.

The analysis was conducted by the New York-based U.S. Institute, a Forum for CEOs of leading investment management firms, McLagan, a provider of compensation consulting services and management consultancy Casey, Quirk & Associates.

It targeted a mix of managers – privately held, publicly traded and wholly or partly owned – with assets under management ranging from well below $50bn to over $1trn in assets.

Source: U.S. Ins7tute/Casey Quirk/McLagan Performance Intelligence Survey

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