McKinsey: Alts Growth To Squeeze Traditional Asset Managers

Aug 8 2014 | 4:32am ET

Alternative investments’ share of global asset management revenues will rise by half in the next six years, a new report from McKinsey & Co. shows.

Currently, alternatives account for about 30% of asset-management revenues, the report says. That will grow to 40% by 2020—even though the industry will account for just 15% of all assets under management.

“For asset managers, the continued rise of alternatives represents one of the largest growth opportunities of the next five years,” McKinsey wrote. And those who ignore the trend stand to lose big.

“The broader asset-management industry has been stuck in the old world of traditional asset return products,” McKinsey’s Ju-Hon Kwek told Bloomberg News. “Those are folks who are going to be squeezed” by the growth of alternatives.

McKinsey dismissed the notion that investors are losing interest in hedge funds and private equity funds, due to high fees and disappointing performance. “To the contrary, McKinsey research clearly indicates that the boom is far from over.”


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Future of Private Equity: New Opportunities, New Challenges

Feb 3 2017 | 6:41pm ET

The private equity industry’s astonishing rebound since the financial crisis has...

 

From the current issue of