Alternative money management firms enjoyed healthy revenue and profit growth for the 12 months through June 30 even as traditional firms suffered declines, according to a survey of 17 publicly traded asset managers with combined assets under management of $19 trillion by strategy consultant Casey Quirk, a Deloitte business.
The 11 traditional managers in the Casey Quirk study saw median revenues drop 3% and profits tumble 21% for the period. The six alternatives firms, by contrast, enjoyed median revenue growth of 14% and profit growth of 17%.
The divergence in profitability and revenue growth favoring alternatives firms is "not letting up," fueling persistent interest among traditional firms in acquiring private equity or private debt shops, lifting out teams or seeking partnerships, said Amanda Nelson, a principal at Casey Quirk, in a Sept. 14 news release.
Among traditional managers, meanwhile, those "which have added private market capabilities have performed relatively well," noted Scott Gockowski, a senior manager at Casey Quirk.
Mr. Gockowski, in an interview, said of 434 money managers in Casey Quirk's database with more than 50% of assets under management in traditional strategies, those with top quartile exposures to alternative strategies saw annualized AUM growth of 6.3% between 2019 and 2022, sharply higher than the 1.5% pace for the bottom three quarters.
With stocks continuing to rebound during the quarter, meanwhile, traditional firms saw median profit growth of 12%, slightly ahead of the 10% gain for alternatives firms.
But alternative firms continued to enjoy relatively strong revenue growth for the quarter at 7%, versus 3% growth for traditional firms.