Publicly traded U.S. asset management firms saw revenues, profits and assets under management decline last year, with weak results for traditional managers more than offsetting solid gains for alternatives managers, according to research from asset management strategy consultant Casey Quirk, a Deloitte business.
Median revenue for the 17 managers tracked by Casey Quirk dropped 4% in 2022, with a 9% decline for the group's 11 traditional money managers overwhelming a median 20% increase for the six public alternatives managers.
Aggregate revenue for the group came in at $63 billion, down from $84 billion the year before but higher than 2020's tally of $59 billion.
The group's median assets under management, meanwhile, fell 16%, reflecting a 17% decline for traditional managers and an 11% gain for alternative managers.
Median profit fell 6%, with a 12% drop for the group's 11 traditional managers offsetting a 27% gain for public alternatives managers.
For 2021, the same group of 17 managers saw median revenue jump 20%, AUM rise 14% and profit surge 33%.
Head count for the 17 managers rose a "surprisingly strong" 8%, according to a Casey Quirk news release, with alternatives manager head count up 14% and the corresponding figure for traditional managers up 1%.
Amanda Walters, a principal with Casey Quirk, noted in an interview that money management firms faced margin pressures during the latter half of the year as both stocks and bonds suffered hefty declines, with continued hiring and investments in technology leaving them hard pressed to lower operating expenses in response.
That pressure could continue during the current year as most of the "low-hanging fruit" when it comes to cost cutting has been exhausted, Ms. Walters said.
Alternatives firms, which maintained a strong pace of investments in 2022, "may face more pressure" in a tougher environment for revenue growth this year, according to the news release.