McKinsey: After crisis, asset managers now need to “pick their spots for growth”

Sep 9th, 2010 | Filed under: Institutional Investing, Today's Post | By:
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A year ago, as the dust was just beginning to settle after the financial crisis, McKinsey & Co. reported that some asset managers were “depressed and in denial” about their prospects (see related post).  These firms’ propensity to not cut costs delivered an average drop in profits of 60-75% in 2009.

The consultancy’s newest report on the industry shows that hope does indeed spring eternal.  According to the report, “The Asset Management Industry: Now it’s about picking your spots” (produced in partnership with Institutional Investor’s U.S. Institute), nearly half (42%) of managers previously categorized as “depressed and in denial” expected profits to increase 10% in 2010 (although, we guess that after having their heads handed to them in 2009, a bounce back of 10% is perhaps to be expected.)  By contrast, the other categories of firms identified by McKinsey expected roughly a 20% increase in profits this year.

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