Asset Managers Broadly Continue Growth in Q2 2024, Private Markets Firms Continue to Lead the Way: Casey Quirk

NEW YORK and STAMFORD, Conn., Sept. 18, 2024 — According to new research from global asset management strategy consultant Casey Quirk, a Deloitte business, publicly listed asset managers saw strong growth from Q2 2023 to Q2 2024, continuing an overall positive trend despite a slight slowdown in the second quarter of this year. Although firms performed well on average over the last year, a wide disparity exists between the highest performing asset managers — a category led by those with a focus on private markets — and the lowest performing firms.

According to Casey Quirk’s survey of 18 publicly traded asset managers with $21 trillion in assets under management, asset managers saw 6% median revenue growth, 4% operating expense growth, and 1% compensation growth from Q2 2023 to Q2 2024. Managers’ median margin grew by 3%, notably with profits expanding for all but three firms over the year – with this improvement, Q2 saw a median margin of 36% for firms in the sample.

“Managers across the industry have continued to see consistent growth, with revenue increases over the past year arriving at all-time highs,” said Amanda Nelson, principal at Casey Quirk. “With broad financial stability came the opportunity for expansion and development, as we saw an increased pace in non-compensation spending among asset managers, in part reflecting increased acquisition activity and a growing investment in technology driven in part by AI interest.”

Meanwhile, publicly listed firms saw slightly more tepid market expansion in the quarter-over-quarter period, with 2% in revenue growth, 2% in operating expense growth, and 0.5% margin growth from Q1 to Q2 2024.

“Listed firms’ expansion slowed slightly this quarter, likely due to volatility in the markets,” Nelson added. “Although the longer-term growth story remains positive, we expect a plateauing market environment to begin to weigh on overall revenues as we approach the end of the year.”

Although firms saw growth on average over the year, the experience differed widely between asset managers in the bottom quartile of performance and those in the top quartile. Among Casey Quirk’s sample, revenue growth ranged from -1% to +11%, operating expense growth ranged from -5% to +9%, and margin growth ranged from 0% to +6%. Amid this dispersion, the winning firms were categorized by private markets, followed by equity & index providers.

“It’s not a new phenomenon for a small set of firms to capture a majority of the flows, but this disparity highlights which categories of firms are thriving in the current environment — most notably, private markets managers,” said Tyler Cloherty, managing director at Casey Quirk. “As private markets continue proving to be a strong source of revenue growth, traditional asset managers will likely intensify their ambitions to expand into the private space.”

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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