If the financial assets of Canada’s charities continue to grow at the annual rate achieved over the past five years, this sector will represent at least a $125 billion opportunity for the almost 100 money managers that currently have a piece of the charitable pie. The major asset owners in the sector – the universities, colleges and hospitals – are seeing a slowdown in growth when compared to the social welfare charities that make up the fastest-growing group.
This shift in growth patterns spells both opportunity and challenge for the asset managers. Opportunity in that there are more assets to manage and more charities to deal with; challenges because social welfare charities tend to be small, scattered, locally-focused and far better-positioned to generate funds than manage funds. This sub-sector may represent an opening for smaller asset managers, including full-service brokerage teams, seeking to enter the charitable sector.
With this as a backdrop, it is no surprise that, according to our Managed Money Advisory Service report http://investoreconomics.com/issue/managed-money-advisory-service, two-thirds of the growth in the number of managers active in the charity sector over the past three years has come from managers with under $500 million in charitable sector assets. Add to that the fact that only 60% of the financial assets of Canadian charities are professionally managed. No wonder this sector may become the next focus for private investment counsel firms facing intense competition and an almost static level of HNW assets under management. Posted by Keith Sjogren firstname.lastname@example.org.