Scale and Consolidation Trends in 2025: A Focus on Growth and Efficiency
An insightful outlook from EY Oceania’s wealth and asset management leader, Rita Da Silva, highlights the critical role that expanded product ranges through M&A will play for asset managers in 2025. Ernst & Young predicts five key trends for asset managers in the upcoming year.
These trends include data modernization and the integration of AI, talent optimization, improved utilization of in-house technology and external ecosystems, regulatory collaboration and innovation, and transparent leadership on sustainability.
One key area to watch is the expansion of product ranges, as players like Pinnacle, Magellan Financial Group, and Platinum Asset Management have already announced plans for diversification.
Morningstar previously noted that active asset management firms could gain market share from passive players by expanding into non-traditional asset classes. However, recruitment of experienced managers may pose a challenge due to the specialized nature of these vehicles.
Da Silva emphasized the ongoing importance of scale and consolidation in the wealth and asset management industry in 2025. Expect to see increased merger and acquisition activity as the focus remains on low expense ratios and expanding product ranges to include alternative investments like private credit for growth.
In a recent discussion, Scarcity Partners’ managing partner, Adrian Whittingham, warned against M&A deals for the sake of it, stressing the importance of strategic rationale and cultural fit in such transactions.
