This report covers multiple financial analysis aspects of the asset management industry, particularly measuring the financial performance of asset managers and their market pricing on an individual and aggregate level.
 
The reader will obtain an overview of the industry’s annual performance returns, how these have evolved from 2012 to 2023, and what factors are significant in their evolution. The report is divided into three sections covering (1) industry financial growth rates versus benchmark, (2) stock market pricing for asset managers, and (3) company level AuM investment performance. Specific industry relevant questions pertaining to growth, operating efficiency, gearing, past and future earnings growth, capital returns, interest rates, price-earnings ratio, and investment performance are answered through descriptive statistics and regression analysis.
 
The audience for this report is CEOs, CFOs, financial analysts, financial journalists, industry consultants, advisory consultants, regulators, AM sales teams, AM clients and potential clients, private investors, portfolio managers, academics, and other interested persons.
 
Table of Contents
Overview
Purpose
Data
Related publications
Executive Summary
Asset Manager Financial Performance
Earnings Growth Relative to Market
Earnings Growth Per Company
Is Operating Efficiency Predictive of Future Returns?
Does Operating Efficiency Predict Future Returns?
Does Gearing Improve EPS Growth?
Do Interest Rates Impact Balance Sheet Capital Mix?
Market Pricing of Asset Managers
Earnings Yield per Company
Equity Risk Premium for Asset Managers
Price to Book
Sensitivity of Asset Manager P/E Ratio to Interest Rates
Does the Market Predict Earnings Growth?
Does the Market Reward Past Earnings Growth?
Risk-Return Trade Off
Investment Performance
Do Asset Managers Report Poor Investment Performance?
Do Investment Performance Numbers Add Up?
Does Investment Performance Influence Net Inflows?
Does Investment Performance Influence Manager Financial Performance?
Do Net Inflows Influence Manager Financial Performance?
Company Summary
Appendix
Regression Results
 
Table of Figures
Table 1: Volume Weighted yoy Change in Profit, EPS, Dividend, Price, and Equity Market
Figure 1: Volume Weighted Cumulative Change in Profit, EPS, Dividend, Price, and Equity Market
Table 2: Equal Weighted yoy Change in Profit, EPS, Dividend, Price, and Equity Market
Figure 2: Equally Weighted Cumulative Change in Profit, EPS, Dividend, Price, and Equity Market
Figure 3: Returns per Asset Manager
Table 3: GPM Autocorrelation
Figure 4: GPM Autocorrelation
Table 4:NPM (t) to mean RoC (t+1,..,t+n)
Figure 5: NPM (t) to mean RoC (t+1,..,t+n)
Figure 6: EPS Growth to Gearing
Figure 7: Capital Mix and Interest Rates
Figure 8: Earnings Yield
Figure 9: Earnings and Dividend Yields
Figure 10: Aggregate Price to Book Ratio
Figure 11: Price to Book Ratio per Company
Figure 12: Asset Manager Earnings Yield and U.S. Interest Rates
Table 5: Regression Results of Future Mean EPS Growth to Earnings Yield
Figure 13: Earnings Yield vs. 2-year Forward Mean EPS Growth
Table 6: Past EPS Growth vs Earnings Yield
Figure 14: Asset Manager Market Risk-Return
Table 7: Investment Performance Reporting
Figure 15: Net Inflows vs Investment Performance
Table 9: Per Company Financial Metrics