Rising markets and belt tightening boosted asset managers’ net margins to 23.4% in the fourth quarter, up from 21.1% in the third quarter, kasina reported Monday. This puts margins back to the level they were at before the credit crisis of 2008.

“Firms are above pre-crisis profit margin levels, supported by a combination of surging markets and some belt tightening,” said Eric Daugherty, director of research and principal at kasina. “From an operational perspective, many firms are actually in a better position than they were in 2007 and 2008. Margins are back to attractive levels—but the market is still substantially below its high.”

Among large asset managers with strong margins, Franklin Templeton and BlackRock stood out, kasina said, while among smaller asset managers, Pzena and Calamos were leaders.

Daugherty said it now remains critical for fund firms to keep their costs low as they delicately balance investments in technology and innovation to compete in the long term.

kasina recommends that firms continue to focus on their core competencies, leverage the power of the web to distribute cost effectively, build strong national accounts teams and focus their distribution efforts on the most profitable market segments and advisers.