Risk.net: Rising Tide Lifts Fund Houses – But Can it Last?

Monthly Credit Trends for Top 100 Fund Managers, Global Airlines & Airports, Australian Corporates, and Irish Corporates & Financials.

By most accounts, these are tough times for asset managers. Margins have been battered by the double whammy of rising costs and falling fees. Firms of all stripes are cutting headcount and consolidating operations in a frantic bid to build scale and improve efficiency. 

The industry faces real challenges, but you would not know it from the recent trend in credit ratings. The credit risk of the top 100 fund managers has decreased by nearly 20% over the past four years, according to Credit Benchmark data sourced from more than 40 financial institutions.   

With global markets already in correction territory amid mounting fears of a coronavirus epidemic, a reversal may be on the cards. January saw the first deterioration in consensus credit ratings for assets managers in five months. 

In this series of monthly articles from Risk.net, David Carruthers, head of research at Credit Benchmark, looks at the improving credit trend and monthly credit changes of the top 100 fund management firms.

Also this month, how COVID-19 is likely to affect an already struggling travel industry with analysis of Global Airlines and Airports credit quality; plus a strong performance for Australian Corporates in the face of the bushfires disaster. We also compare the credit health of Irish Corporates vs Financials amidst Brexit.

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Credit Benchmark brings together internal credit risk views from over 40 leading global financial institutions. The contributions are anonymized, aggregated, and published in the form of consensus ratings and aggregate analytics to provide an independent, real-world perspective of credit risk. Risk and investment professionals at banks, insurance companies, asset managers and other financial firms use the data for insights into the unrated, monitoring and alerting within their portfolios, benchmarking, assessing and analyzing trends, and fulfilling regulatory requirements and capital.