$11.0bn
$X.Xbn
12,212
431
$X.Xbn
Trading conditions have been challenging for fund managers, as fierce competition has resulted in cost-cutting initiatives. In particular, actively managed funds have suffered from a substantial reduction in management fees. The ongoing price war in passive investment in the exchange traded funds (ETFs) market has exerted further downward pressure on margins. The COVID-19 pandemic, geopolitical tensions, inflationary pressures and subsequent interest rate hikes led to significant uncertainty and volatility in financial markets. This has negatively influenced the valuation of some securities, resulting in declines in AUM and higher withdrawal requests. Overall, fund management services revenue is expected to weaken at an annualised 3.5% over the past five years, including an anticipated dip of 2.3% in 2023-24, to total $11.0 billion.
The rise of environmental, social and governance (ESG), and thematic investing has strongly influenced funds management revenue in recent years. Investors are increasingly looking to invest in funds that align with their social and sustainability goals, prompting fund managers to launch new funds and offer methods like custom indexing to meet demand. This trend has opened the door for fund management companies to carve out market niches. Products like ESG funds and custom indexing also come with higher management fees, offsetting further margin declines from mounting competitive pressures.
Profit margins are on track to rise thanks to increased investment in ESG that will support growth in funds management services. Fund management companies are set to allocate more resources to ensure compliance with sustainability claims, amid the growing regulatory crackdown on greenwashing. The launch of the first ever set of global sustainability reporting standards will standardise ESG-related disclosures and enhance the credibility of sustainable funds. Emerging technologies like tokenisation and quantum computing, combined with the potential managed investment scheme reform in Australia, will revolutionise funds management in the coming years. These new forces and trends are why fund management revenue is forecast to expand at an annualised 3.8% through the end of 2028-29, to $13.3 billion.
Industry revenue has declined at a CAGR of 3.5 % over the past five years, to reach an estimated $11.0bn in 2024.
Market size is projected to grow over the next five years.
Company | Market Share (%)
2024 | Revenue ($m)
2024 |
---|---|---|
Macquarie | 3,750.9 | |
First Sentier Investors Holdings | 1,014.2 | |
IFM Investors | 617.3 |
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Industry revenue is measured across several distinct product and services lines, including Deposits, Debt securities and Domestic equities. Deposits is the largest segment of the Funds Management Services in Australia.
Global market accessibility and a shrinking domestic securities exchange has propelled demand for overseas assets
Fund management service providers mainly provide funds management services, including insurance funds management, public offer unit trusts, government funds and overseas funds. Fund management services generate income by providing portfolio investment services and investment consultant services on a commission and fee basis. Providers also earn revenue on a performance fee basis, where fees are directly tied to the effective management and growth of client portfolios.
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ANZSIC 6419 - Funds Management Services in Australia
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Global events like the COVID-19 pandemic and escalating geopolitical tensions have created economic uncertainties, resulting in a decline in AUM. Combined with interest rate ...
Learn about an industry's products and services, markets and trends in international trade.
The global market has become more accessible, while the domestic stock exchange has shrunk, bolstering demand for overseas assets. That’s why fund managers are expanding thei...
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
New South Wales is home to many fund management companies. As Australia’s financial capital, Sydney is a natural hotspot for fund managers, as it provides easy access to high...
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Margins have been deteriorating due to stiff competition, driving funds management giants toward mergers and acquisitions to maintain dominance. This strategic shift, coupled...
Learn about the performance of the top companies in the industry.
Delays in renewable energy projects have negatively affected funds management giants with holdings in the green energy sector. Difficult conditions in the green energy sector...
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Organisations like the Financial Services Council contribute to funds management services through policy influence, research and professional development programs. The counci...
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Margins have come under pressure due to the growing popularity of cost-effective passive investments and strict regulations. Even so, ESG funds, which command a premium due t...
Including values and annual change:
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Key data sources in Australia include:
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The market size of the Funds Management Services industry in Australia is $11.0bn in 2024.
There are 431 businesses in the Funds Management Services industry in Australia, which has grown at a CAGR of 2.8 % between 2019 and 2024.
The market size of the Funds Management Services industry in Australia has been declining at a CAGR of 3.5 % between 2019 and 2024.
Over the next five years, the Funds Management Services industry in Australia is expected to grow.
The biggest companies operating in the Funds Management Services market in Australia are Macquarie, First Sentier Investors Holdings and IFM Investors
Deposits and Debt securities are part of the Funds Management Services industry.
The company holding the most market share in Australia is Macquarie.
The level of competition is high and increasing in the Funds Management Services industry in Australia.