Growth in the asset management industry has been confined to a limited number of scattered segments, according to a new report.
The latest annual global asset management report by McKinsey & Company, the management consulting firm, shows that asset managers have lost share in global financial assets in the past four years and that profit levels are well below their levels before the crash in 2008.
The retail segment has taken the biggest hit, with an average yearly decline of 1.6 per cent since 2007. The institutional side has had annual growth of 0.4 per cent over the same period.
The Hunt for Elusive Growth: Global Asset Management in 2012, based on McKinsey’s annual benchmarking survey of around 300 asset managers, found that recovery in the industry ground to a halt last year.
Assets under management as a share of total financial assets globally fell from 25 per cent to 22 per cent between 2007 and 2011. At the end of last year, global AuM stood at $38 trillion.
Profits have declined by almost a third over the same period.
Net inflows have averaged 0.6 per cent a year since 2008, compared to between 3 and 5 per cent in 2002 to 2004.