While there has been much talk about consolidation in the mutual fund industry, that isn’t likely to occur among mid-size firms with $150 billion to $300 billion in assets, according to Robert Manning, chief executive officer of
Firms in that range “can grow organically, sustain their margin and afford to pay the talent in the organization to generate the alpha,” Manning said.
Pointing to the swap between Citigroup and Legg Mason, and between Blackrock and Merrill Lynch, Manning said, “Those were unique situations where there were asset management businesses buried inside of proprietary distribution companies that needed to be stripped out.”
On the other hand, companies with less than $100 billion in assets are likely to consolidate, he predicted, since they can realize cost savings.
