Performance under pressure 

The asset management industry is currently under considerable pressure. Despite global growth in assets under management (AUM) of just under 10% in 2023 following a decline in the previous year, asset managers are faced with various challenges that are making the business environment increasingly complex and competitive.

In the European market (sample of 40 asset managers), profit margins have fallen to their lowest level since 2020 while costs have stagnated. The continuing pressure on the industry is reflected in the cost-income ratio, which rose to a historically exceptional level of 70%. It remains unclear whether these developments are of a temporary nature or long-term trends.

The study simulates various scenarios, from “worst case” to “best case”. The results show, among other things, that cost discipline remains in focus and that the business model of medium-sized asset managers in particular is vulnerable in times of crisis.

The survey conducted then identifies central areas of action for enforcing cost discipline in the long term. The industry is actively looking for ways to increase efficiency, particularly through advancing digitalization and the use of AI: There is a great need for data quality improvements and stable IT systems. Moreover, alternative asset classes offer promising prospects. For example, ELTIF 2.0 serves as a vehicle for giving private investor groups access to new asset classes.