Institutional managers are raking in more money in the retail market compared to their retail-oriented counterpart as investors and their advisors lean towards non-traditional investment strategies, a survey showed.
The survey showed institutional managers increased revenue by 25 per cent in 2013 from the retail channel, compared to an 11 per cent rise for retail managers.
This is a big jump from 2012, when revenue from the retail path shot up 10 per cent for institutional managers and 7 per cent for retail managers.
But in 2011 and 2010, retail managers beat institutional managers, accumulating more revenue in the retail space.
The 11th annual Performance Intelligence survey They surveyed privately held, publicly traded and wholly or partly owned firms with assets under management from below $US50 billion to over US$1 trillion in assets.
It was conducted by management consultant firm Casey, Quirk and Associates in partnership with compensation consulting services firm McLagan.
"Recent revenue gains by institutional managers in the retail market offer compelling evidence that strategies favoured by institutions — including non-traditional fixed income, emerging markets debt and equity, alternatives, and multi-asset class solutions — increasingly are making their way into the portfolio of retail investors," partner at Casey, Quirk and Associates Jeffrey Levi said.
He added that those retail fund sponsors without these capabilities are hiring institutional sub advisors to manage the portfolio, and chasing acquisitions to equip themselves the skills they do not have.
Head of asset management at McLagan Adam Barnett said it is a testing time for investment firms as they try and adapt to an environment of slower growth and a move to more unconstrained and multi-asset class strategies among institutional and individual investors.
Director of the U.S. and European Institutes Fred Bleakley said while North America and Europe remains the epicentre of the global investment management business, the survey shows the Asia Pacific will emerge with the largest organic growth rate over the next five years.
