Buoyant markets in the second half of 2020 bolstered European money manager AUM to a record €11.3 trillion ($12.7 trillion) at the end of the year.
Increased AUM among money managers tracked by Moody's Investors Service also contributed to strong earnings, with average EBITDA margins among the nine independent money managers in the sample increasing to 31.8%, vs. 29.3% for the first six months of 2020. The increase reflected higher management fees and lower operating costs due to reduced travel and marketing expenses amid the pandemic. Distribution costs were broadly unchanged, Moody's said.
Combined AUM for the 20 managers in the overall sample was up 8.7% vs. figures as of June 30, as central bank and fiscal stimuluses pushed markets into positive territory as they worked to combat the economic impacts of the coronavirus pandemic.
Total net inflows for the group were €156 billion, vs. €65 billion for the six months ended June 30. Net inflows "reflected growing investor confidence thanks to government and central bank support, as well as optimism over the coronavirus vaccine rollout," a report of the analysis said. Inflows were mainly into equity strategies, with some going into short-term debt. ESG strategies also remained popular.
Total revenues were up 10% vs. figures for the first half of 2020, again reflecting higher average AUM and stronger inflows. Figures were not available.
However, Moody's maintained the global money managers' industry outlook as negative as the pandemic has intensified long-term headwinds. Markets and investor flows remain at risk from an uneven economic recovery, while secular trends have intensified, including a deteriorating operating environment, changing investor preferences and a "highly competitive market in which scale, diversity and access to distribution have become essential," the report said.