The latest benchmarking study from global consultancy McKinsey suggests that assets under management are growing at a double-digit rate and ...

The latest benchmarking study from global consultancy McKinsey suggests that assets under management are growing at a double-digit rate and earnings performance remains solid. Based on data from 80 firms with over $8 trillion under management, the study reveals that asset managers generated an average pre-tax margin of 31 per cent in 2005, a 5-year high. But, it is suggested, below the numbers is a different picture. The research shows that a full 41 percentage points of operating margin – up from 32 two years previously - now separates the top- and bottom-third players, a disparity that has widened significantly over the past three years. Moreover, an increasing proportion of asset managers are now earning margins under 20 per cent, as the bottom tier performers fall further behind the rest of the pack. The report contains analysis both of the main problems facing asset managers and some of the strategies adopted by successful companies. The study can be downloaded free at www.mckinsey.com