Casey Quirk: Asset Manager Financials Continue to Slide

Consultant firm Casey Quirk reports that asset manager financials are still feeling the impact from the severe slump earlier in 2020. Large, diversified publicly traded managers are faring best, while firms primarily dependent on specific asset classes and client segments produced more mixed results, according to Casey Quirk. In an analysis of second-quarter 2020 financial results of 19 firms worldwide with a combined $16 trillion in AUM, Casey Quirk reported that median revenue at traditional publicly traded asset managers fell 6.4% in the three months ended June 30, compared with the first quarter of 2020, as investors moved assets to lower-fee bond and cash funds amid the market uncertainty. Other findings from Casey Quirk: 

  • Ongoing fee discounting contributed to a 2.2% decline in average realized fees, and operating expense was 2.4% lower versus the first quarter of 2020.
  • While AUMs climbed 12% from March 31 to June 30, average AUM fell 6.2% and median net flows declined 0.3% at the firms surveyed.
  • On a year-over-year basis, median revenue for managers in the Casey Quirk universe fell 7.1%; average realized fees were 3.7% lower; and operating expense also declined 3.7%. Average AUM and AUM at the end of June were 5.4% and 4.4% lower, respectively, and median net flows fell 0.6% compared with the second quarter of 2019.
  • Median operating margins were 27% in the second quarter of 2020 versus 29% for all of 2019.

Casey Quirk’s recent white paper, “Righting the Ship: Transforming Active Equity for a Competitive World” argues that despite the challenging climate, opportunity remains for wins in active management.