Despite seemingly lacking scale, more
specialised offerings can be much more efficient
and profitable.
For instance, franchises like Eurizon
(Intesa’s asset management subsidiary) and
Nordea Asset Management cater to local markets
but are extremely efficient with costs equal to 22
per cent and 29 per cent to their income
respectively.
Similarly, Legal and General, with its
focus on passive products and the UK domestic
market also ranks well with costs at 50 per cent of
income. In fact, such firms have efficiency metrics
more comparable to global independent players
than a global proprietary franchise.
Change is likely to be more necessary at
asset managers owned by large, global franchises
such as Credit Suisse Asset Management, Axa
Investment Management, and UBS Asset
Management. Costs at these three firms are
between 70 and 80 per cent of income versus the
industry average of 64 per cent. These firms can
choose to de-globalise and pursue regional
strategies in line with the smaller asset managers
mentioned above, or they can pursue mergers
and acquisitions in the pursuit of scale.
EU Forecast
euf:b18:144/nws-01