Tue, May 17, 2022
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Investment managers face fierce competition

Monday, May 10, 2021

Laxman Pai, Opalesque Asia:

The traditional asset managers around the world face pressure on margins "in 2021 and beyond due to fee compression driven by fierce competition," revealed a study.

According to a new report from Fitch Ratings, the traditional stock and bond investment firms can weather the pressure with scale and caution with leverage.

Though investment managers brace for more pressure on their operating margins this year, the report claims that Fitch-rated investment managers can withstand the pressures given their strong franchises, generally moderate leverage, and large scale.

According to the report, the customer preference for lower-cost passively managed funds is likely to continue as passive funds continued to outperform the majority of active strategies in 2020 despite market volatility. We expect the pressures to continue to encourage traditional investment managers to seek scale with mergers or acquisitions.

The sector's sensitivity to financial markets was highlighted in 1Q20 when equity markets fell sharply at the onset of the pandemic. This triggered steep declines in the value of assets under management (AUM) at all Fitch-rated traditional investment managers, resulting in lower management fees, which are generally calculated based on the net asset value of AUM.

Financial markets bounced back quickly, helped by monetary and fiscal stimulus measures in the majority of G7 economies and since supported by the prospect of economic r......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Long/short equity hedge fund with bear market experience has a winning quarter[more]

    B. G., Opalesque Geneva: Experience during a Russian bear market lasting five years enabled Christian Putz to identify certain investment patterns in the market which he now applies to his current investment strategy. London-based ARR Inv

  2. Opalesque Exclusive: Global equity manager focuses on symbiotic value chains[more]

    B. G., Opalesque Geneva: A global equity manager has made a point of focusing on the phenomenon of shrinking supply chains and avoiding zero-sum business models. London-based Tollymore Investment Partners is a private partnersh

  3. Satori Capital intros energy transition fund, a long/short equity strategy[more]

    Laxman Pai, Opalesque Asia: Dallas-based alternatives manager founded on the principles of conscious capitalism, Satori Capital has launched Satori Environmental, a long/short equity strategy that primarily invests in securities impacted by the global energy sector's shift from fossil-based s

  4. The Big Picture: With the war, E, S, and G have collectively moved back to the fore[more]

    B. G., Opalesque Geneva: In this interview, Dr. Patrick Welton, founder and CIO of Welton Investment Partners, offers his observations on the major macro themes expected to affect the comm

  5. Other Voices: The selloff is overdone[more]

    Authored by Heeten Doshi, founder of Doshi Capital Management. Anyone who is still bearish and calling for more downside is foolish. The selloff is overdone. To point to further declines from here is poor risk management. With the Nasdaq 100 down 22% and S&P 500 down 13% for the year