Global assets under management increased over 10% in 2014 to $67 trillion, according to the 2015 Performance Intelligence asset management benchmarking survey from Casey Quirk, a management consultant for investment management firms.
By comparison, industry revenue only rose 6.3% to $319 billion. Aggregate average fees fell to 48 basis points, according to the survey.
The increase in AUM is driven mostly by market appreciation, the survey found. Net flows contributed just 2.6% to the overall growth, and largely in the retail market. The report found the institutional market is “stagnant” and redemptions outpaced gross sales last year.
Casey Quirk surveyed 110 firms in North America, Europe and the Asia Pacific region.
The survey noted that while profit margins are the highest they’ve been in five years at 34%, investors moving toward passive strategies and distributors taking revenue share from managers is putting more pressure on fees. In the U.S., the share of passive investments increased to 26% from 15% seven years prior. Furthermore, passive strategies accounted for 93% of total net new flows for U.S.-registered products, according to the survey.