Schroder Investment Management Australia expects a consolidation of the Australian fund management industry in the coming years, triggered by the downturn in financial markets.
"If you look at the list of Aussie equity managers out there, there is some 130 plus managers running an equity fund. There are almost more fund managers than there are stocks. Quite clearly [this] is ridiculous," Schroders chief executive officer Greg Cooper said last Friday.
The drop in funds under advice caused by falling share prices has meant that revenues for some firms will halve this financial year.
"Revenues have reduced substantially, and that comes at the expense of less people in the industry," said Cooper, who is also a board member of the Investment and Financial Services Association.
"I easily see the industry moving to having half the number of participants it has now."
In early January, Credit Suisse announced the sale of its traditional fund management business to Aberdeen Asset Management, while Societe Generale merged its asset management business with Credit Agricole.
"I think you will see more of that - where asset management is a small part of a much larger business," Cooper said.
He also expects a reduction in the number of boutiques, because they do not have enough resources to take a hit in profits or fund adequate research.
"As an industry what we need to do is increase the time that is spent on real asset class research, not just follow what brokers say," he said.
"It takes a large organisation to fund this approach over multiple asset classes and fund those teams through times like today."
