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Alternative Market Briefing

Listed asset managers display financial resilience in Q1 despite virus-sparked sell-off

Friday, May 29, 2020

Laxman Pai, Opalesque Asia:

Publicly-traded asset managers that run traditional stock and bond funds suffered far less than many investors in the first quarter, said a study.

"Despite the steep sell-off in global equities and fixed-income markets amid the COVID-19 pandemic in Q1, traditional publicly traded asset managers remained resilient," it said.

According to the analysis of 19 firms with some $16 trillion assets under management by Casey Quirk, a Deloitte business, the median revenue at traditional publicly traded asset managers fell 6.7% over the three months ended March 31, while operating expense slid 3.9%.

While AUM slumped 16.7% from Dec. 31, 2019, average AUM dipped only 2% as the severe market decline occurred late in March. Fees were stable, net flows declined less than 1%, and operating margins slipped 1.9% in the first quarter of 2020 for the median firm, said the report by the asset management strategy consultant.

Comparable metrics to the year-earlier quarter were favorable as asset managers reaped the benefits of buoyant capital markets for most of the 12 months between March 2019 and March 2020.

Median revenue at the publicly traded managers in the Casey Quirk universe rose 3.9%; operating expense fell 5%; operating margin climbed 5.5%; average AUM gained 4.1% in the first quarter of 2020 compared with the first quarter of 2019.

"Investors reacted to the steep March selloff by moving to safer havens from riskier assets and that was re......................

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