Nearly half of all asset
managers suffered outflows in 2015 as investors consolidated their funds into
passive and multi-asset strategies, according to a Casey
Quirk by Deloitte survey.
The survey of more than 100
asset managers, conducted with consulting and data firm McLagan, found that
index and multi-asset funds attracted more than 90% of net new money in 2015. Respondents
were members of the US Institute and European Institute, forums for leaders at
asset management firms.
Overall, the asset management
industry grew just 1% to $69 trillion in 2015, up from $68 trillion in 2014.
The low growth was driven by industry-wide investment losses of 0.8%, according
to the report. Asset flows, meanwhile, totaled 1.4%, down from 2.7% in 2013 and
positive—were highly concentrated, with the five top firms capturing 29% of
flows, compared to 24% in 2014 and 18% in 2013. The bottom five firms
represented 34% of negative flows, up from 19% in 2014 and 1% in 2013.
While industry flows are
increasingly driven by retail investors—individuals were projected to generate
90% of all new money invested by 2020—the survey found that institutional
investors are also shifting their allocations.
Asset owners have become more outcome-oriented and cost conscious in their manager selection,
according to the report, resulting in higher allocations to multi-asset and
passive products. Heavy smart beta and index users grew 5% from 2012 to 2015,
while multi-asset-focused investors increased 6%.
Meanwhile, asset owners also
became more reliant on gatekeepers such as consultants,
with the percentage of investors highly influenced by a central research team
growing 7% over the last three years. According to the survey, these investors
are using gatekeepers to target managers that are “expert” allocators and true
producers of alpha.
“The asset management industry
is now in an era of disruption and consolidation,” said Fred Bleakley, director
of the US Institute. “Surviving asset management firms will be leaders in
specialty active management, smart beta passive, and multi-asset class
Asset Management Can Save Itself