Aggregate assets managed by publicly traded money managers fell 10% to $24.31 trillion in the first quarter amid the coronavirus-induced market plunge — the worst quarterly decline since the fourth quarter of 2008 when total assets fell 11.5%.
The damage to global markets from the impact of the coronavirus pandemic in the quarter ended March 31 "revealed the haves and have-nots and widened the gap between the leaders and laggards," said Michael J. Cyprys, senior analyst covering asset managers and brokers, in New York-based Morgan Stanley Institutional Securities.
Managers' bottom lines also took a hit, with 20 of the 25 publicly traded managers Pensions & Investments tracks reporting lower revenue on a quarter-to-quarter basis as of March 31.
Only two managers had positive revenue growth in the first quarter, 20 managers reported negative revenue growth, and three firms did not provide revenue in their earnings releases.
Money managers offering a diverse array of investment strategies and those with existing scale in cash management fared much better in the first quarter than firms with narrower offerings, especially those focused on equities, which were hit hard by market declines, industry sources said.
"It was not surprising to see drops in assets under management as markets severely contracted in the first quarter, especially in March," said Mathias Neidert, managing director and head of public market research for investment consultant bfinance International Ltd., London.