Cumulative assets under management (AUM) for a composite group of 15 asset managers totalled $12.56 trillion at the end of the first quarter of 2018, down $10bn from $12.57 trillion in the fourth quarter. The decrease marked the group’s first quarterly market depreciation since the third quarter of 2015, according to a report by SS&C Technologies.
The composite group includes money management giants such as Alliance Bernstein, BlackRock, and Franklin Templeton.
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Of the 15 firms polled, 12 reported a fall in AUM with market volatility being a primary reason for the decline.
According to the study, fears of a global trade war further contributed to the decline in market performance.
Reduced AUM led to lower asset-generated fee revenues, and in turn resulted in a decrease in operating margins, the study revealed.
However, the composite group also posted a 26% net income during the quarter, which was the best level recorded in 16 quarters.
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By GlobalDataSS&C head of investment products research and consulting Michael Andrews said: “During the first quarter of 2018, operating margins for the public asset management firms declined from an all-time high achieved in the fourth quarter of 2017.
“While the globally synchronized “Goldilocks economy1” is likely not rolling over, market volatility – that came on with a vengeance during Q1 – sequentially drove down AUM, asset-generated fees and consequently impacted margins. While the asset management industry is still quite profitable, the lingering question going forward will be whether we have encountered a turning point in the trend line.”
