Global Asset Management 2014: Steering the Course to Growth is The Boston Consulting Group’s twelfth annual worldwide study of the asset management industry. Our research found that asset managers in 2013 finally recorded their second consecutive—and strongest—year of solid growth since before the crisis. Global assets under management rose to record levels, profits were strong, and net new flows made solid gains.
The results reflected the expansion of a real recovery from the year before, when the industry finally returned to growth after four years of inertia, as we noted in Global Asset Management 2013: Capitalizing on the Recovery. This was the case particularly in most developed markets, where asset growth gathered speed even as growth slowed in many emerging markets.
Yet, as this year’s report makes clear, now is not the time for complacency. Asset growth continues to be largely the result of rising equity prices on global financial markets. Net flows remain a modest part of total growth, and most of those new flows go to specialists, solution providers, and nontraditional asset managers. The global profit pool remains under pressure, while net revenues lag below the peaks achieved before the financial crisis.
As traditional actively managed core assets remain vulnerable to the market’s evolution, the future for all types of managers looks increasingly complex, costly, and constrained by waves of regulation. Managers need a long-term strategy that anticipates those changes.
For all these reasons, developing the right target operating model is crucial for steering a course to profitable growth.
A target operating model—beyond boosting efficiency—can provide the blueprint that managers need to unlock cash and free management attention for product innovation, entry into new asset classes, and development of client relationships. We believe it is a key to flexibility, scalability, and profitable growth.
This report, like its predecessors, is the product of comprehensive market-sizing research. We covered 43 major country markets (representing more than 98 percent of the global asset-management market) and focused exclusively on assets that are professionally managed for a fee. We also analyzed the external forces shaping the fortunes of asset management institutions worldwide.
In addition, this report includes insights drawn from a 2014 benchmarking study of more than 120 leading asset managers—representing 53 percent of global AuM. Our aim was to collect data on fees, products, distribution channels, operating systems, and costs in order to gain insights into the current state of the industry and its underlying drivers of profitability.
More than a decade after BCG’s first annual Global Asset Management report, the breadth of our market-sizing research and benchmarking studies has expanded. The goals of the report, however, remain steadfast: to probe beneath the surface of the market’s evolution, identify trends, and provide insights that help managers build strong and prosperous paths to the future.