McKinsey: North American AUM Hit $43 Trillion Last Year

A new report from the consulting giant shows strong growth in the money management business
A new McKinsey report puts total North American AUM at $43 trillion. This report notes that the market hit the massive figure after a 7% jump from the previous year. That said, industry profits (not-including alternative investments) declined by 3.7% to just $42.6 billion.
Inside the McKinsey AUM Report
Meanwhile, rising costs are eating into profitability, says McKinsey. The report, “Beyond the Rubicon: Asset management in an era of unrelenting change” hit the markets on Wednesday. The report states that the money management industry in North America faces a “structural transition.”
It explored six primary themes in the North American markets.
- First, institutions and retail clients are hungry for yield and diversification in a face of slowing economic growth and lower interest rates;
- Second, investors now expect “good performance at the best price” instead of the more traditional “fair price” model;
- Third, investors are increasingly challenging the idea of active management;
- Next, the market now favors distributors and intermediaries;
- Fifth, the growing need to cut costs and deliver – doing more with less;
- Finally, the important balance between scope and scale.
Highlighting Alternatives
Meanwhile, the changes in the North American market highlight the importance of alternative investments in the future.
As we noted earlier this week, Brookfield said that since 2009, approximately $6 trillion flowed into private assets. This has also resulted in an increase in the share of total investments for real assets and alternatives. The allocation has further increased from 5% in 2000 to 25% in 2018.
Ultimately, Brookfield believes a low rate world could fuel allocation to alternatives to 60% levels by 2030.

Latest Alternative Investment News

FinTech: Pluto Inks Collaboration With Mastercard For B2B Payments In The UAE
Pluto, a prominent provider of financial corporate spend management solutions in the UAE, has forged a strategic alliance with Mastercard (NYSE: MA), the global technology giant in the payments sector….

Alternative Investments/Real Estate: Alternative Investing Platform Yieldstreet Acquires Real-Estate Focused Cadre
Yieldstreet, a prominent private market investment platform, has officially announced its acquisition of Cadre, an online real estate-focused investment platform catering to institutional and high net worth investors. This strategic…

Venture Capital: Rocket Propulsion Startup Ursa Major Lands $138M
Ursa Major Technologies recently closed its Series D and D-1 funding rounds, securing a substantial $138 million investment led by Explorer 1 Fund and Eclipse, with participation from RTX Ventures,…

Artificial Intelligence: Saudi Venture Fund Forced To Sell Shares In Altman-Backed Chip Startup Rain AI
The Biden administration has compelled Saudi Aramco (TADAWUL: 2222)-backed venture capital firm, Prosperity7, to divest its shares from Rain Neuromorphics, a Silicon Valley AI chip startup supported by Sam Altman,…