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DST Research Finds Firms’ AUM, Margins Surged in 4Q of 2017

DST’s Research, Analytics and Consulting reports that the 15 publicly-traded firms that comprise its Asset Manager Composite showed healthy asset growth coming out of 2017. According to DST, the fourth quarter of 2017 was a “culmination of the broad-based capital markets and macroeconomic momentum that seemed to build throughout the calendar year.” The report presented three high-level takeaways:

  • Cumulative assets under management grew 18.1% year-over-year to a record of over $12.5 trillion, with 14 of the 15 asset management firms experiencing sequential growth in AUM. Nearly 81% of the sequential change in AUM can be attributed to market appreciation.
  • Asset-generated fee revenues also experienced accelerating growth – up 14.0% year-over-year and up 4.1% sequentially – for the Composite group. Record fee revenues of $9.7 billion drove operating margins for the Composite to a record of 35.1% - last achieved during the second quarter of 2015.
  • Despite the record operating margin for the Composite group, the dynamics at the company level were mixed: eight of the 15 firms saw sequential improvement in operating margins, while seven of the 15 experienced a sequential decline. The three largest public asset management firms (BlackRock, T. Rowe Price, and Invesco) saw their operating margins drop modestly.