Asset managers are facing a multi-year adjustment process
that will affect earnings and shares, according to analysts at
The bank’s equity research team listed several
"major forces of disruption" impacting the sector on
An unrelenting macro environment, substitute products,
growing regulatory pressures, intense rivalries, demographics
and technology are among them.
The factors have squeezed net new money growth among
publicly trading asset managers to a standstill, Morgan Stanley
data shows, compressing revenues by -3% in 2016 (on average)
and shrinking profits by -10% in 2016.
"We expect firms to adapt by evolving their fee structures,
introducing new products and solutions, tuning-up performance
engines and redefine the active manager’s value
proposition," wrote equity analyst Michael Cyprys in a note to
Rethinking distribution approaches, revisiting capital
management policies and seeking partnership/M&A are also
Standard Life and Aberdeen Asset Management recently
announced plans to merge.
Henderson and Janus Capital Group agreed to tie-up in
"We foresee a multi-year adjustment process that will affect
the earnings and shares of publicly traded traditional asset
managers," Morgan Stanley's Cyprys added.
"This process could drive some firms to go private and usher
in an era of large-scale consolidation — not without
"The best deals, in our view, will bolster scale while
adding investment capabilities and distribution access."
Globally, Morgan Stanley’s analysts reckon best
positioned firms are BlackRock, Blackstone, Invesco, Oaktree
Capital, Partners Group and BT Investment Management.
Improving are Amundi, Schroders, Perpetual Ltd, Magellan, and
Legg Mason and lagging behind are Platinum Asset Management,
Waddell & Reed, and Janus Capital.