Asset Managers Must Invest in Private Markets Now, Bain Says

A wide variety of asset managers need to look at investing in private markets if they want to avoid wipe-out, while revamping their entire strategies to ride the wave, according to Bain & Co.

The business models relied upon by fund firms that have traditionally invested in public markets are becoming obsolete, with margins dropping to 8 basis points by 2022 from 15 basis points in 2007, and management fees declining as well, Bain said in a report Wednesday. As a result, many such companies are piling into private markets, an area that requires different capabilities and significant investment.

“It’s ...