Private Markets to Grab 39% of Asset Management Revenue by 2030
Morgan Stanley and Oliver Wyman report that private markets will dominate asset management revenue by 2030, despite lower AUM shares.
The global asset management landscape is undergoing a seismic shift. While the sheer volume of assets under management (AUM) continues to climb, the real money is moving toward specialized offerings. According to a joint research report by Morgan Stanley and Oliver Wyman, private markets are poised to generate a staggering 39 per cent of the global asset management industry's revenue by 2030.
What makes this projection particularly striking is the disparity between assets and earnings. Even though private markets are expected to account for only 15 per cent of total assets under management, their contribution to the bottom line will be disproportionately high. This trend signals a critical pivot: for asset managers, the size of the portfolio is no longer the primary indicator of success; rather, it is the type of product they offer.
The AUM Paradox: More Assets, Lower Fees
The report highlights a challenging reality for the industry: higher assets do not automatically equal higher profits. While global managed AUM is projected to surge from USD 159 trillion in 2025 to approximately USD 247 trillion by 2030, the revenue growth is not keeping pace.
- Revenue Growth: Expected to grow at 7 per cent annually through 2030.
- AUM Growth: Expected to grow at a faster rate of 9 per cent.
- Fee Compression: Average fees are projected to dip from roughly 35 basis points to 32 basis points.
Furthermore, the report notes that about three-quarters of the projected increase in AUM will stem from market appreciation rather than fresh infusions of investor capital.
The Rise of Private Markets
Private markets are expected to see a significant boost in assets, rising from around USD 22 trillion in 2025 to USD 37 trillion by 2030. This growth is anticipated to be most concentrated in three key areas:
- Private equity
- Infrastructure
- Selected private debt strategies
The driving force behind this surge is a change in investor appetite. Incremental capital is increasingly flowing from wealth investors and insurers. In fact, retail and wealth management channels are becoming pivotal; these investors are projected to provide about 60 per cent of the net new capital flowing into private markets by 2030, despite currently holding only 25 per cent of the assets.
Adapting to a New Era: AI and Customization
As competition intensifies and fees face downward pressure, asset managers must evolve. The report suggests that firms need to build investment structures specifically tailored to the liquidity, regulatory, and servicing needs of these new investor classes.
The AI Advantage
Beyond product diversification, technology is seen as a vital tool for survival. The research points to Artificial Intelligence as a major catalyst for efficiency. Firms that successfully implement reusable, company-wide AI capabilities could potentially improve their cost-income ratios by as much as 15 percentage points by 2030.
"AUM is not the measure of success," the report emphasizes, urging managers to focus on high-growth products and capabilities to outperform the industry.