Alternative investment firms rated by Fitch Ratings reported accelerated growth in management fees for the year ended Sept. 30, according to a report from the ratings agency.
Management fees expanded 14.1% in the year ended Sept. 30 compared to the prior year ended Sept. 30, 2018, according to the report.
The report said the growth of management fees was supported by the desire of limited partners to consolidate investments with fewer managers, new product development, strong investor, as well as strong expansion of fee-earning assets under management, which increased 13.9% year-over-year.
Fee yields, however, have flattened out and are trending downward, according to the report. Yields, which are management fees as a percentage of average fee-earning AUM, were 0.89% for the 12 months ended Sept. 30, the same as the year-over-year period. From the same period in 2009, fee yields were down from 1.05%.
Credit profiles among seven of the eight diversified alternative money managers rated in the report — Apollo Global Management, Blackstone Group, Brookfield Asset Management, Carlyle Group, Fortress Investment Group, KKR & Co. and Oaktree Capital Group — remained stable. The outlook for Ares Management remains positive as a result of management fee growth and related scale benefits, according to the report.
The report is available to Fitch Ratings Research subscribers.