Asset managers deliver median 15% revenue growth in 2013: Casey Quirk

Median operating profit for those firms was 31% last year, the second-highest achieved since 2009, and just below the median 32% profit margin posted in 2011, according to Casey Quirk.

One group of firms — alternative asset managers — outperformed their traditional rivals in both revenue growth and profit expansion in 2013. Alternative firms enjoyed a median 35% revenue growth last year, compared with 14% for traditional firms. Alternative managers also generated a 41% median operating profit last year, vs. 29% for the traditional firms.

While market appreciation powered the bulk of the increase in assets under management last year at listed managers, the alternative firms outgained the larger group of traditional firms in attracting net new money from investors, according to the Casey Quirk analysis.

“Alternative firms are benefiting as both institutional and individual investors search for products and solutions that deliver less correlation and volatility, and additional sources of income,” says Jeffrey Levi, a director at Casey Quirk. “These firms are also achieving more consistent operating margins than in the past.”

“The global asset management industry’s growth opportunities favor alternative firms and managers focused on retail and high-net-worth individual investors,” Levi says.

Additionally, the analysis of publicly traded managers indicates that North American firms outperformed their European peers in 2013 in both revenue growth and operating profit margins. The 36 listed managers in the U.S. and Canada generated a median 16% revenue growth and a median 31% operating profit, compared with 12% and 27%, respectively, for the 12 UK and continental European firms in the analysis. The results illustrate why North American markets should continue to attract and reward sustained efforts by international managers, Levi says.