, Columnist
Asset Managers’ Troubles Aren’t Temporary
The industry is facing structural headwinds likely to push those who aren’t big enough or specialized enough out of business.
Keep telling yourself that.
Photographer: Michael Nagle/BloombergThis article is for subscribers only.
The share prices of listed fund managers fell, on average, by a quarter in 2018. They’ve responded predictably, shedding staff to lower costs, expecting business to recover in due course. What they don’t seem to understand is that they’re facing difficult, possibly insurmountable long-term problems that demand much more drastic changes.
Asset managers, especially diversified firms, benefited greatly from the economic and financial environment of the last several decades. As savings grew, funds aggregated them for investment. Frothy markets boosted returns, despite occasional reversals.