Investment Week editor Katrina Lloyd says there are wider questions for the industry as Aberdeen/Standard Life look set to become the newest fund powerhouse.
Industry consolidation
Finally, there is also a wider question for the industry if Aberdeen/Standard Life becomes the newest fund powerhouse.
It has been well documented that pressure has been building on active asset managers, especially mid-sized groups, for some time as they tackle passives challenges, increased regulatory pressures and margin erosion.
Ironically, the consolidation trend could lead to the proliferation of monolith organisations formed from two or more groups (which themselves are the result of a number of bolt-on acquisitions as organic growth gets harder to find) with different structures and cultures.
Middle-tier asset managers under threat as M&A ramps up
This should bring economies of scale (dropping costs for the end investor) but if not handled properly, there is a danger the reasons investors chose an independent active asset manager in the first place (for example, greater autonomy for their fund managers) becomes lost within a much bigger group, as committees take over and more time may be given over to distribution.
These are worst case scenarios and there are a number of larger groups that have successfully managed to grow significantly and still maintain a strong performance record. However, the challenge for the new era fund giants will be retaining fund management talent.
The middle may be getting squeezed, but the boutique specialist active managers will be waiting in the wings to pick up the spoils - in terms of managers and clients - if their giant rivals take their eye off the game.
