(Bloomberg) — Private markets will generate more than half of the money-management industry’s revenues by 2030, an increase that reflects the intensifying competition among firms to expand in private debt and equity and infrastructure, according to PwC.
“The winners won’t be those who gather the most assets, but those who rewire the fastest,” Albertha Charles, global asset and wealth management leader at PwC UK, said Monday in a report that surveyed 300 global firms and investors.
The asset- and wealth-management industry will take in about $432 billion in revenue from private assets in 2030, exceeding the totals for traditional actively managed investments and for passive products, the consultancy found. In 2024, private assets accounted for 44% of total revenue, with traditional investments making up most of the industry total, according to PwC.
Still, private markets have become increasingly crowded. Many traditional fund houses — including Franklin Resources Inc., Invesco Ltd. and State Street Corp. — have acquired or partnered with private-markets firms recently to gain a foothold.
BlackRock Inc. has spent more than $25 billion since the start of 2024 to grow in private credit and infrastructure and compete with the likes of Blackstone Inc., Apollo Global Management Inc. and Ares Management Corp.
The asset management industry is also facing unrelenting fee pressure on traditional stock, bond, money-market and multi-asset funds, with almost 60% of institutional investors surveyed by PwC saying they’re likely or very likely to replace a manager solely for cost reasons. As a result, fees are expected to decline across active and passive strategies, even while costs remain stubbornly high.
“Traditional cost-cutting has barely made a dent,” PwC said. “Diversifying into new asset classes and expanding into new markets add cost and complexity.”
Fast forward five years, though, and technology will help drive profits in an industry with ever-narrowing margins, according to PwC.
“Asset managers see AI integration and automation as the most important actions they’re taking today to transform and future-proof their business models for 2030,” the firm said in the report.
