Casey Quirk: Listed US and Canadian Asset Managers Achieve Record Revenue Growth in 2021; Talent Recruitment Drove Fastest Expense Spike Since 2017

NEW YORK and STAMFORD, Conn., March 10, 2022 /PRNewswire/ -- Fueled by double-digit equity market appreciation in the U.S. and developed markets, publicly traded standalone asset managers in the U.S. and Canada achieved a second record year for revenue in 2021, up 22%, according to an analysis by global asset management strategy consultancy Casey Quirk, a Deloitte business. 

Revenue for the 17 asset managers in the Casey Quirk sample reached $84 billion in 2021. The median operating profit margin, as measured by EBITDA (earnings before interest, taxes, depreciation and amortization), rose to 32% in 2021 from 28% in 2020.  

Total assets under management (AUM) increased 15% to nearly $20 trillion at year-end 2021 from a year earlier, according to Casey Quirk's analysis of 11 traditional and six alternative asset managers.

"After years of margin compression, the profit rebound in the past two years is a welcome industry development," said Amanda Walters, a principal at Casey Quirk. "As a result, a reinvigorated industry has been spending at the fastest rate since 2017, foremost on talent recruitment. Going forward, however, revenue and margin gains are likely to stall without market appreciation."

Expense growth was 15% higher in 2021 than in the year-earlier period, according to the Casey Quirk analysis, fueled by compensation spending, which rose 22%.

While asset managers overall enjoyed superior revenue growth in 2021, alternatives managers, or those primarily focused on private markets, far outperformed traditional firms, or those investing mainly in publicly traded stocks and bonds. Alternatives managers in Casey Quirk's sample generated median revenue growth, excluding unrealized gains, of 48% in 2021.

Median revenue growth at traditional managers was 18% higher in 2021 vs 2020. Revenue expansion at traditional firms was buoyed by market-driven growth in active publicly traded equities, which boosted median fee capture by 7% in 2021.   

"The gap in financial performance between traditional and alternatives firms continues to support robust M&A activity, with traditional firms seeking to acquire alts capabilities," said Scott Gockowski, senior manager at Casey Quirk.

By year-end 2021, total deal volume was almost two-thirds higher since the beginning of the pandemic in 2020 than in the earlier two-year period, according to Casey Quirk.

The Casey Quirk analysis of publicly traded asset managers includes firms with more than $100 billion in AUM and a market capitalization of more than $500 million. Periodic exclusions are made on the basis of corporate actions or restructurings that materially affect financial results in a way that is not reflective of ongoing operations. Casey Quirk excludes firms that do not consistently report financial results by the eighth week following the end of the fiscal quarter, resulting in a sample that comprises U.S. and Canadian companies.

Casey Quirk, a business of Deloitte Consulting LLP, is a leading management consultancy that focuses solely on advising asset management firms. Casey Quirk was established in 2002 and acquired by Deloitte in 2016. The organization has advised a majority of the 50 largest asset management organizations worldwide, including eight of the top 10. Casey Quirk provides senior leadership teams with broad business   strategy reviews; investment positioning and strategy consulting; market opportunity evaluations; organizational design; ownership and incentive structuring; and transaction due diligence. For more information, please visit www.caseyquirk.com.

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SOURCE Casey Quirk