Morgan Stanley examines how fee compression, passive investing, and technology are reshaping asset management economics. The paper argues industry leaders could consolidate share as weaker firms face pressure, while active management’s struggles persist with only 16% of large cap managers outperforming benchmarks through May 2016.
Asset Management: Disruption Looms; How to Survive the Storm?
Morgan Stanley
Michael Cyprys
Research
114 Pages
Key Takeaways
Passive Flow Dominance: Since 2007, passive domestic equity products gathered $576 billion while active domestic equity funds lost $743 billion in cumulative flows.
Active Performance Slump: Only 16% of large cap managers beat benchmarks through May 2016 versus 34% during 2015, challenging assumptions active strategies outperform during volatility.
Profit Pool Pressure: Asset management generated $83 billion profit pools with 35% to 40% operating margins, yet industry organic growth slowed from 6.3% precrisis averages to 1.3% in 2016.
Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week
