2025 midyear outlook: Global asset managers

Bloomberg

02-07-2025

Three keys for 2025: Global asset managers
Asset-manager stocks track market despite 12% cut to 2025-26 EPS
Asset-manager stock returns have kept pace with the broader market in 2025, despite a 12% cut to 2025-26 EPS estimates tied to April turmoil. Though forecasts have stabilized, they've trailed the wider rebound amid lingering macroeconomic uncertainty, tempering earlier double-digit profit-growth expectations. Valuations have recovered, yet the group still trades at a 50% discount to the broader sector.
Asset managers match 7% market return year to date
Global large-cap asset managers have performed roughly in line with the broader market's 7% year-to-date return, following a year of outperformance in 2024 that reversed underperformance in 2022-23. Asset-price gains — particularly in equities — remain critical to supporting top- and bottom-line outlooks, with improved organic-growth trends offering an additional lift. Still, sustained optimism hinges on a more stable macroeconomic backdrop. Peers in the BI large-cap asset-manager index rose by a median 26% in 2024, topping the MSCI ACWI's 18% gain, after underperforming by 9 percentage points in 2023.
DWS leads year-to-date gains at 25%, while T. Rowe is the weakest with a 16% decline. CI Financial led 2024 performance on a take-private bid, while Franklin trailed amid Western Asset-related strain that emerged in 2H.
Markets drive 12% cut to managers' 2025-26 EPS
Asset-manager EPS estimates have stabilized since late April, though they've trailed the broader market rebound following sharp cuts amid the earlier equity drawdown. Full-year 2025 and 2026 EPS forecasts are down 12%, with aggregate revenue estimates 6% lower and operating income off 8% year to date. T. Rowe has seen the steepest revenue downgrade (8%), given its equity-heavy exposure, while Franklin shows the largest profit-expectation cut amid unique Wamco-related strain. BlackRock's estimates have held up best, reflecting platform resilience and support from M&A.
Among BI-tracked peers, Franklin and AllianceBernstein show the widest positive gap between stock-price change and EPS revisions — lifting multiples — while T. Rowe and Invesco reflectnegative gaps that have compressed valuations.
Multiples reclaim 1Q levels, reflect secular pressure
The BI large-cap asset-manager peer group's forward P/E has recovered from April lows and now sits slightly above its long-term average, having reclaimed early 1Q when global asset prices were near their peak. At 10.4x, the group trades above its 2023-24 average of 9.6x, aided by market gains and generally supportive organic growth, though volatility surrounding broader macroeconomic uncertainty remains a risk. Still, valuations are well above the 8.9x seen in 2022,when sharp equity and bond declines were a top and bottom-line headwind. The five-year average stands at 9.9x — roughly a 50% discount to the MSCI ACWI Index — a gap that's widened after holding a premium through much of 2010 to mid-2014.
The persistent valuation gap reflects fee and margin pressure alongside structural organic-growth headwinds.
BlackRock tops manager multiples amid market swings
BlackRock's 21x 2025 P/E highlights its leadership in organic growth, profitability and resilience –supporting a premium to its 19x historical average and leading traditional peers. Group valuations appear mostly elevated relative to norms, though fundamentals remain mixed. Franklin (11x) trades the furthest above trend, despite Wamco challenges that are reshaping its franchise. T. Rowe also trades at 11x but sits the furthest below norms, as equity-heavy exposure heightens profit sensitivity to persistent outflows. Invesco's 9x multiple, the lowest among peers, reflects a painful but necessary asset-mix transition that weighs on its earnings power.
The group's 11x five-year median still trails the 15x for BI-tracked alternative managers, underscoring divergent growth, fee and margin trajectories.
PE-manager multiples reflect core fee growth, exit challenges
US private equity manager valuations account for resilient core-fee fundamentals overcoming industry challenges due to market uncertainty. Exit delays weigh on 2025 profit prospects, even as managers express some 2H optimism. Credit operators are faring better, reflecting demand and asset growth, as well as managers less dependent on monetization. Shares fell a median 18% through June 18, yet most P/E multiples recovered from April lows, with the group trading over 19x. Fee growth may persist, while activity and exits are key 2H variables.
Brookfield's valuation leads on lack of exit dependence as Ares' holds on its credit operations, along with Blackstone. KKR's and TPG's growth helps. Apollo's multiple was helped by credit business, but insurance's slower growth has weighed. Carlyle's multiple held in 1H, yet trails peers.