More Cash Registers Clanging at Money Management Firms

February 28, 2011 ( – The fourth quarter of 2010 witnessed a healthy rebound in asset manager margins, according to kasina.

A kasina news release said that showing was supported by an 11% gain in The Dow Jones Total Stock Market Index. Quarter over quarter, industry operating margins increased from 27.5% to 31.4%, and net margins increased from 21.2% to 23.4%.

Firm-to-firm variations remain, but overall, margin compression pressures and worries that seemed so prevalent into early 2010 have eased.

“Firms are above pre-crisis profit margin levels, supported by a combination of surging markets and some belt-tightening,” said Eric Daugherty, Director of Research and Principal, in the news release “From an operational perspective, many firms are actually in a better position than they were in 2007 and 2008. Margins are back to attractive levels, but the market is still substantially below its high.” Most firms are leaner and operating more efficiently.

Although firms tend to cluster in a pack, the results highlight the opportunities both for large scale players and small, niche asset management firms. Leading the large firms were Franklin Templeton and Blackrock, while Pzena and Calamos continue to lead the smaller firms in operating margins, kasina asserted.

The company said asset managers continue to delicately balance gaining short-term profits with investing adequately in technology and innovation to build industry leading organizations for the long term.

More information is at