“The share of total long-term mutual fund assets run by external managers—sub-advisors—is holding steady. That may be a surprise given the trend toward in-house management and the reduction in funds as sponsoring companies merge and then rationalize their product lines.
This issue of Insight measures the current state of the sub-advisory business. Since our last report on this topic in April 2003, we have enhanced and expanded our database. And, for the first time, we are able to track what’s going on with multi-manager funds, an important emerging development.
The key message is that the growth of the sub-advised market has stabilized, reflecting the maturing and consolidation of the mutual funds industry. But the actual asset base is still sizeable, and there is keen competition for those dollars as money management firms battle each other for mandates in the same sort of takeaway game that occupied mutual fund companies for so many years. As a result, nimble players continue to enjoy abundant opportunity.”