Publicly traded U.S. and Canadian money managers tracked by strategy consultant Casey Quirk produced record aggregate revenue of $84.3 billion in 2021, up 43.4% from the prior year, data released Thursday showed.
The median operating profit margin measured by earnings before interest, taxes, depreciation and amortization rose to 32% in the year from 28% in 2020.
Collective assets under management by the 17 firms in Casey Quirk's sample totaled $20.2 trillion, up 14.8% from the prior year.
Expense growth was 15% higher in 2021 thanks to a 22% increase in compensation, Casey Quirk data showed.
"After years of margin compression, the profit rebound in the past two years is a welcome industry development," said Amanda Walters, a New York-based Casey Quirk principal, in the release.
"As a result, a reinvigorated industry has been spending at the fastest rate since 2017, foremost on talent recruitment. Going forward, however, revenue and margin gains are likely to stall without market appreciation," Ms. Walters added.
Casey Quirk researchers noted in the report that while traditional managers in the list had "superior" growth in 2021, alternative investment specialist managers significantly outperformed them.
Alternative managers generated median revenue growth, excluding unrealized gains, of 48% in 2021, while traditional managers' median revenue growth was 18% higher than in the previous year.
"The gap in financial performance between traditional and alternatives firms continues to support robust M&A (merger and acquisition), with traditional firms seeking to acquire alts capabilities," said Scott Gockowski, a Casey Quirk senior manager, in the release.
Casey Quirk's universe of listed manager includes stand-alone U.S. and Canadian money managers with assets of at least $100 billion and market capitalization of more than $500 million.
Eleven of the publicly money management companies Casey Quirk tracks are traditional managers and the rest are alternative investment firms.
Casey Quirk is a practice of Deloitte Consulting.