Institutional-oriented managers are increasing their revenues from retail customers at a faster rate than their retail-oriented counterparts, a survey by Casey Quirk and McLagan suggests.
The consultants say the change is caused by investors and advisers shifting their focus to non-traditional investment strategies. Retail fund sponsors without the required capabilities are hiring institutional sub-advisors to manage the portfolios or are pursuing acquisitions to gain skills they lack.
The survey suggests that institutional managers increased their revenues from retail customers by 25% in 2013, compared with an 11% gain for retail-focused managers.
This compares to a 10% increase in retail revenues of institutional managers in the previous year, and a 7%-increase for their retail counterparts.
In both 2011 and 2010 the situation was reversed, with retail managers generating more revenue growth from the retail market than institutional managers.
“Recent revenue gains by institutional managers in the retail market offer compelling evidence that strategies favored by institutions – including non-traditional fixed income, emerging markets debt and equity, alternatives, and multi-asset class solutions – increasingly are making their way into the portfolios of retail investors,” says Jeffrey Levi, partner at Casey Quirk.
Last year, the global investment management industry made revenues of $302 billion (€225 billion) and had assets under management of $58 trillion, says the research.
The consultants surveyed 90 money managers worldwide which invest a total of $25 trillion for institutions and individuals.
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