Stock analysts are predicting consolidation in the asset management industry and increased market share for the winners even as demographics open up more asset gathering opportunities, writes Sam Mamudi in the WSJ Fund Track
The column wraps up recent research reports from, Stifel Nicolaus, Goldman Sachs and Jefferies & Co. Winners will be those with access to capital or strong performance track records, they predict.
Goldman analysts have boosted their outlook for share prices of asset managers by 15 percent even as the predict that it will take a few years for profits to recover to pre-Bear levels (only a relative handful of asset managers are both independent and publicly traded).
Jefferies analyst Daniel Fannon also foresees higher distribution costs for asset managers due to the recent consolidation of broker-dealers. The changes mean some fund firms will lose spots on preferred lists. Fund firms will also be forced to sell through smaller networks, raising wholesaling and other costs.
Fannon also foresees fund firms with capital having the opportunity to buy others at "firesale" prices.
Fannon believes Invesco
, Eaton Vance Corp.
, Affiliated Managers Group Inc.
, BlackRock Inc.
and Legg Mason Inc.
could see their flows for some funds improve due to their distribution and marketing strengths.
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