Asset Managers Must Invest in Private Markets Now, Bain Says
- Private-market assets under management to reach $65 trillion
- Bain calls it ‘the biggest opportunity in financial services’
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A wide variety of asset managers need to look at investing in private markets if they want to avoid wipe-out, while revamping their entire strategies to ride the wave, according to Bain & Co.
The business models relied upon by fund firms that have traditionally invested in public markets are becoming obsolete, with margins dropping to 8 basis points by 2022 from 15 basis points in 2007, and management fees declining as well, Bain said in a report Wednesday. As a result, many such companies are piling into private markets, an area that requires different capabilities and significant investment.