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Laxman Pai, Opalesque Asia: Asia is the world's fastest-growing asset-management market. The region captured nearly 45 percent of global flows over the past five years. Assets under management leapt by 11 percent year-on-year to a record $16 trillion by the end of 2017. Over the past decade, AUM has increased by $9 trillion.
According to a study by McKinsey & Company, titled 'Global Banking Practice', Asia now represents about 18 percent of the global total of $89 trillion. Revenue pools are currently $66 billion, up 188 percent from 2000.
The report said that Asian profit margins are also much higher than in Europe and North America. That's another big part of Asia's appeal to multinational firms.
The growth in profit margins - driven primarily by higher revenue margins - is exceptional, considering operating cost margins also rose from 28.9 bps in 2016 to 29.3 bps in 2017.
"While firms believe cost margins are contained given the higher AUM growth, we believe the industry lacks efficiency of scale, a prime reason why absolute cost pools rose by 13 percent in 2017. We expect this trend to continue, given the fact that Asia's asset managers will need to make investments in digitization, compliance, and especially onshore China, keeping cost pressures high in the next three to five years," the report said.
Emerging Asia lead the way
Naturally, rates of growth differ across countries. Emerging markets, especially mainland China, ...................... To view our full article Click here
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