Three keys for 2025: Global asset managers
Manager stocks fueled by favorable markets, yet choppiness eyed
Global asset managers’ upward trending EPS estimates might be interrupted if recent market choppiness persists after a generally strong 2024. Near-record global equity market capitalization is a support, but favorable conditions must hold to back the 12% earnings growth seen in 2025. Manager forward multiples reclaimed their five-year average as stock gains outpaced positive EPS estimate revisions.
Manager stocks get market lift; Volatility eyed
Global large-cap asset-manager stocks’ median gain topped the broader market in 2024 after underperforming n 2022-23 amid generally weaker markets. Asset-price gains since, particularly in equities, aid the top- and bottom-line outlook, with better organic-growth trends an added boost. Such conditions are key to sustaining optimism, with recent volatility eyed. Stocks in the BI large-cap asset-management index median return of 26% in 2024 topped the MSCI ACWI’s 18% advance after a 9 percentage-point underperformance in 2023, when gains of 14% trailed the market’s 23%.
CI Financial’s more than doubling in 2024 led peers on a take-private bid at a 33% premium. Janus Henderson’s 48% gain followed, with IGM rising 38%. Franklin’s 27% drop was worst amid Western Asset issues, with Schroder’s 20% drop following.
Market momentum key to upward EPS revisions
The market’s general upward trend for most of 2024 was a positive lift to EPS estimates across large-cap global asset managers’ 2025 forecasts, though recent choppiness bears watching. EPS estimates for this year were revised a median 6% higher across the BI large-cap global asset-manager index, with 2026 up 13%. Janus Henderson and T. Rowe Price had the greatest upward 2025 EPS estimate revisions, while Schroders and Franklin saw the only negative revisions.
Over the past six months, 2025 EPS estimates rose a median 4%, trailing the 18% median stock-price gain. Shares of CI Financial, BlackRock and Affiliated Managers show the largest positive gap in stock-price change to EPS revision vs. negative gaps for Schroders and T. Rowe Price.
Multiples reclaim averages on market, flow support
The BI large-cap asset-manager peer group’s forward P/E ratio is in line with its long-term average, reclaiming the level it entered 2024 with. Multiples spent most of the year in line to one standard deviation below its five-year average, after drifting to almost two standard deviations below in October 2023 before markets improved. At 9.9x, the metric is close to the 10.4x at the start of 2024, 9.8x at the end of 2022, 10.4x for 2021 and 11.6x for 2020. In 2022, multiples were challenged as market help waned after providing support in 2021. M&A optimism was a lift to 2020.
Multiples are below their 10-year average, showing a discount to the MSCI ACWI after generally holding a premium from 2010 to mid-2014. This reflects broad fee and margin pressure, as well as organic-growth challenges.
