When global capital markets were down or flat in the third quarter, the assets managed by publicly traded alternatives managers went up, according to research from asset management consultant Casey Quirk, a Deloitte business.
Assets under management for the median publicly traded alternatives firm for the quarter ended Sept. 30 went up 2% while global capital markets delivered flat or negative returns, according to a news release.
By contrast, the AUM for the median listed traditional asset managers declined 1% over the same period.
Alternatives managers also generated higher profit margins than traditional firms in the quarter, according to Casey Quirk. Median operating margin was 46% for alternatives managers in the third quarter and 31% for traditional managers, vs. 41% and 26%, respectively, during the same period a year ago.
"It is abundantly clear that listed alternatives managers are outperforming their traditional peers on key financial metrics, driven by investor demand and their ability so far to resist fee pressure," said Amanda Walters, a principal at Casey Quirk, in a news release announcing the research. "In turn, that has provided alternatives firms more flexibility than traditional asset managers to reinvest and spend on growth initiatives."
Scott Gockowski, senior manager at Casey Quirk, added in the release: "We expect the persistent financial success of alternatives managers will continue to attract increasing attention from traditional asset managers and result in more M&A activity."
On a year-over-year basis, the total AUM of the 24 publicly listed alternatives and traditional asset managers in the U.S. and Canada that Casey Quirk tracked reached $32 trillion as of Sept. 30, up 20% from the year-earlier period. The aggregate revenue of these managers, meanwhile, increased 22% in the third quarter compared with the same period the year prior.