Active asset managers around the world took a hit in 2015, with the number of investment houses rising, assets under management falling, and more and more investors opting for low-cost passive strategies over more expensive, active ones, a new report by Casey Quirk has found.
The Connecticut-based asset consultant found that muted in-flows – down one percentage point to 1.6% – combined with tumbling global share prices saw global assets under management fall by 2.4% to US$65trn (£45.62trn). That made 2015 the worst year since the global financial crisis for active fund managers.
All this, meanwhile, saw total global revenue fall by $10bn, or 2.9%, to $309bn, the Casey Quirk data shows.
Passive strategies gain
One of the most striking statistics highlighted in the report was the move towards passive funds. Casey Quirk estimated that net flows into passive strategies at US$747bn in 2015, while active investments attractive less than half that figure, $312bn.
The passive market has grown by 73% since 2009, and now accounts for 19% of the total investment market, according to the data.
Another striking development was a massive tilt seen towards individual over institutional investors. In 2014, individuals accounted for 93% of inflows, and Casey Quirk expects this trend to continue.
“2015 is in fact emblematic of the ‘new normal’ we see emerging in the industry,” Casey Quirk partner Jeffrey Levi said.
“Beyond a low-growth environment and fee pressure, investment management leaders are confronting a broad industry shift, in which individual investors are the primary source of new revenue.
“Going forward, industry leaders will differentiate themselves through product development, brand, specialized client engagement, and risk management,” he said.