We’re in for a massive contraction in the global wealth management industry, according to Daniel Freedman, managing director and co-founder of London & Capital – which describes itself as a fast growing and innovative asset manager with a focus on absolute return investing. “I foresee a period of around two years in which sub-par wealth managers will go bust and there will be a major consolidation in the industry,” he told WealthBriefing. Mr Freedman said that recently lots of wealth managers began to optimise, or stress, their business models, to expand to the maximum size possible. “These businesses will now need to contract back to their core in the current business cycle,” he said. As we’re now entering a serious downturn London & Capital is seeing more private clients and private client managers unwilling to make investment decisions until the problems have been resolved. But managers with a capital preservation focus, like London & Capital do well in turbulent times such as these, said Mr Freedman. As a sign of the times, London & Capital have seen a significant increase in both CVs and businesses for sale. “We’ve had senior business managers coming in to see us for sales jobs, which has been a big surprise. And the businesses that we now see for sale are much more sensibly priced than they were last year. Although it’s a trickle at the moment, by May it could be a flood and lots of these could be forced sales,” Mr Freedman said. “Many of the businesses for sale will be in the sub-£500 million of assets under management sector which don’t have the depth of talent and the marketing clout to develop their business. Some of these will be fund of hedge funds businesses."