Page 40 - ASSET MANAGER 11 (EN)

40 • EUROPEAN BANKING STUDY ASSET MANAGER • NO. 11/2019
ALARMING MARGIN EROSION
IN ASSET MANAGEMENT
Europe's banks have been facing a profitability problem for years. According to the current European Banking Study by strategy and management consultancy zeb, profit- ability deficits will continue to increase if not consistently counteracted.
Authors: zeb Partner Franz-Josef Reuter, Head of Public & International Affairs
The European asset management industry needs to be much more focused and cost-efficient in the face of falling margins if it wants to grow profitably. As a recent study by the strategy and management compa- ny zeb shows, the asset management industry faces major structural challenges after decades of unbroken growth, especially in the areas of innovation, prod- uct design and sales management. 46 European as- set managers with strong business in Europe, serving about one third of the globally managed institutional assets with a total of 29.3 trillion euros, were analyzed.
Small is beautiful
In detail, the study revealed that, in addition to specialized asset managers, who clearly differentiate themselves from their competitors in terms of themes or asset classes, the smaller providers in the international context, who are part of a strong, independent sales network, were successful in particular during the investigation period. The weak- est performers were medium-sized players offering both active and passive investment strategies with a relatively high cost / income ratio and the lowest new money inflow, which was well below the average. Especially those com- panies that tried to cover almost all investment themes or
asset classes and did not achieve any significant econo- mies of scale underperformed. Norman Karrer, co-author of the zeb study, confirms: "Overall, few asset managers achieved profitable growth in the period under review, increasing profitability while gaining new customers. The top league of asset managers is characterized above all by above-average growth, above-average profitability and a decreasing cost and income ratio."
ABOUT ZEB
Founded in 1992, zeb is one of the leading strategy and management consultancies for financial ser- vices in Europe. Internationally, 1,000 employees work for the group in 18 locations. In Germany, zeb has offices in Frankfurt, Berlin, Hamburg, Munich and Münster (headquarters). International locations are in Amsterdam, Kiev, Copenhagen, London, Luxembourg, Milan, Moscow, New York City, Oslo, Stockholm, Warsaw, Vienna and Zurich. Its clients in- clude major European and private banks, regional banks and insurance companies. Zeb has already been classified and awarded several times in industry rankings as the "Best Advisor" in the financial sector.