The past 24 months have been a wild ride for the asset management industry. It went from the depths of despair during the fourth quarter of 2008, when the global economy teetered on the brink of disaster, to the heights of elation during the last nine months of 2009, as markets around the world came roaring back. This year, of course, has been marked by renewed volatility, whether from sovereign debt troubles in Greece and other European nations, a fall in the value of the euro, fears of inflation as government spending has exploded, stalled economic recoveries around the globe or the BP oil spill in the Gulf of Mexico, the worst in America’s history.
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“People are walking on egg shells again,” says Scott Powers, president and CEO of Boston-based State Street Global Advisors.
With $1.9 trillion in assets, SSgA is the second-largest firm in the II300, Institutional Investor’s annual ranking of the 300 biggest U.S. money managers. Asset management firms of all sizes are increasingly coming to terms with just how fragile their business models may be, even as asset-based fees have long been touted as almost bulletproof, delivering money in good economic times and bad. BlackRock’s $15.2 billion purchase of Barclays Global Investors from Barclays last year — which created the largest asset manager in the world, a $3.3 trillion behemoth that tops the II300 — ....