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Laxman Pai, Opalesque Asia: Global asset managers expect assets under management (AUM) to grow a "relatively conservative" 21% between 2019 and 2025, but anticipate fee margins falling 11%, putting pressure on their profits.
Against that backdrop, the industry expects to keep costs under control but anticipates that the cost:income ratio will nonetheless rise 3% by 2025, revealed a new survey by UK law firm Simmons & Simmons in partnership with Bloomberg.
There may be some modest but welcome relief from a balance of risks skewed mildly to the upside, it said.
As AUM growth outpaces costs and fee margin continues to fall, the survey identified that a significant 'Fee Gap' will open up by 2025.
The survey results settle concerns about faster-than-GDP AUM growth. Between now and the end of 2025, the surveyed asset managers expect 21% growth in global AUM, broadly in line with recent global GDP trends. While that is lower than some other estimates for AUM growth, it seems a safer expectation given the recent trend of falling savings rates.
Geographically, APAC countries are expected to show the fastest growth to 2025, with Europe (ex-UK) and the U.S. a couple of percentage points behind the average. It may be that the U.S. is held back by its larger proportion of large funds with over $400 billion in AUM: when you're that big, it's hard to run faster.
The survey pointed out: "Perhaps the standout result here is the strong showing for the UK, which is...................... To view our full article Click here
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