Eighteen publicly traded asset managers with $21 trillion in assets saw 6% median revenue growth in the year ended June 30, 2024.
That's according to new research released on Sept. 18 by asset management strategy consultant Casey Quirk, a Deloitte business.
Meanwhile, operating expenses grew by 4% and compensation edged up by 1% over that period. In addition, the median profit margin grew by 3%, with profits expanding for all but three firms over the year period ending June 30.
“Managers across the industry have continued to see consistent growth, with revenue increases over the past year arriving at all-time highs,” said Amanda Nelson, principal at Casey Quirk, in the release. “With broad financial stability came the opportunity for expansion and development, as we saw an increased pace in non-compensation spending among asset managers, in part reflecting increased acquisition activity and a growing investment in technology driven in part by AI interest.”
However, these publicly listed firms witnessed sluggish expansion in the second quarter of 2024m, compared to the first quarter of 2024. In that quarterly period revenue growth and operating expense each grew by 2%, while margins edged up 0.5%.
“Listed firms’ expansion slowed slightly this quarter, likely due to volatility in the markets,” Nelson added. “Although the longer-term growth story remains positive, we expect a plateauing market environment to begin to weigh on overall revenues as we approach the end of the year.”
Moreover, while these asset managers generally enjoyed growth over the year-over-year period, there was a disparity between the top performing firms and those at the bottom.
For example, between the 25th and 75th percentiles, revenue growth ranged from -1% to +11%, and operating expense growth ranged from -5% to +9%.
Casey Quirk found that the best performers tended to have a heavy focus on private markets.
“It’s not a new phenomenon for a small set of firms to capture a majority of the flows, but this disparity highlights which categories of firms are thriving in the current environment — most notably, private markets managers,” said Tyler Cloherty, managing director at Casey Quirk. “As private markets continue proving to be a strong source of revenue growth, traditional asset managers will likely intensify their ambitions to expand into the private space.”
