Fund managers make record-equaling profit despite fee pressure: study

[July 08, 2015]  LONDON (Reuters) - Assets managed by fund firms globally hit a new high last year, helping the industry to record-equaling profits in spite of margins that were squeezed by investor pressure on fees, a study showed on Tuesday.

Boston Consulting Group's survey of 135 asset managers with a combined $39 trillion under management -- representing 53 percent of the global total -- found that rising asset values helped to lift industry profits last year to match the $102 billion chalked up in 2007.

While assets under management were up 8 percent year on year, profit as a percentage of net revenue was steady at 39 percent, compared with a high of 41 percent before the financial crisis, Boston Consulting said.

The pressure on fees kept revenue growth to 7 percent, compared with 9 percent growth in 2013.

"This isn't the first year that fee pressure has contributed to declining revenue margins. Institutional investors are monitoring fees more closely, challenging and renegotiating them," the report said.

Fees are also being driven lower on the retail side, driven by a regulatory push for greater transparency, the report added.

(Reporting by Simon Jessop; Editing by David Goodman)

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