Casey, Quirk: 2012 Weak for Revenue Growth

Returns may have been good, but revenue growth overall was weak among asset management firms in 2012.

Median revenue growth among 37 firms analyzed increased 4.4% in 2012, according to a recent analysis from Casey, Quirk & Associates. The 2012 median barely beat the 4.21% increase for the Barclays Aggregate Bond Index last year and lagged behind the double-digit gains posted by indexes tracking U.S. and international stocks. Meanwhile, revenue growth gained 8% and beat annual gains posted by major stock and bond benchmarks in 2011, and jumped 22% 2010.

Regarding faltering revenue growth, Casey Quirk pointed to its forecast in a recent whitepaper that investment managers worldwide will grow less than 1% from net new money annually through 2017, compared with 6% to 7% before the financial crisis.

But the 25 U.S. firms surveyed continue to outperform asset management subsidiaries of larger financial conglomerates in profitability. U.S. firms posted a median profit margin of 33% in 2012, compared with 25% for 12 subsidiaries of larger financial institutions.

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