Report: Consolidation, New Competition To Shake Up Asset Management

Jun 16 2014 | 9:44am ET

More than half of asset managers will be out of the business by 2030, according to a new report from KPMG.

The casualties will succumb to obsolescence or acquisition, according to the accounting firm. “We are on the verge of the biggest shakeup the industry has experienced, and the message to asset managers is clear: Adapt to change or your business won’t survive,” KPMG global head of asset investment management Tom Brown said.

“We expect to see mass consolidation in the industry and predict that within 15 years there will be half the number of players currently in the market.”

Among the changes shifting the ground under asset managers are technology, taxes, regulation, new geographies and increased competition from new entrants to the space. Indeed, some of the most popular companies with no current interest in asset management could be the biggest threat of all.

“Trusted brands that resonate and appeal to a more diverse client base, as well as the younger generation, may be able to build scale quickly,” Brown told Reuters. “We could see the Apples, Googles, or large retailers of the world becoming the next big powerhouses in investment management.”

Among the opportunities available to asset managers both established and otherwise are new, emerging markets, including China, India, Mexico and Nigeria, where the middle class is growing.


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Moore Capital PM Fired After Raucous Hamptons Party

Jul 7 2016 | 10:47pm ET

A portfolio manager for Louis Bacon’s $15 billion hedge fund Moore Capital Management...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...