In addition to the market effect, the increase in assets is also the result of record net issuance that reached €156bn in the second half of 2020, “as investor confidence improved due to central bank and government support, and optimism about the rollout of the coronavirus vaccine,” notes Moody's Investors Service.

These asset increases are having a positive impact on players’ profitability: management fee revenues climbed 10% in the second half of 2020 and independent asset managers’ EBITDA margins increased to 32%, up from 29% in the first half of the year, due to higher management fees, lower operating expenses and stable distribution costs. The pandemic also reduced travel and marketing costs.

Another positive is that “from a credit perspective, the moderate debt burden of fund managers will also support their financial flexibility.”

For all that, Moody's outlook for the global asset management industry remains negative. “The coronavirus crisis will intensify long-term challenges. Financial markets and investor flows remain threatened by the uneven global economic recovery. Trends such as a deteriorating operating environment, changing investor preferences, and a highly competitive market have also intensified during the pandemic,” the analyst says.

This article was originally published on Paperjam.lu in French. It has been translated and edited for Delano.