Funds Management Services in Australia - Market Research Report (2014-2029)
Melbourne, Australia
Last Updated: January 2024
ANZSIC K6419aRevenue
$11.0bn
Past 5-Year Growth
Profit
$X.Xbn
Employees
12,212
Businesses
431
Wages
$X.Xbn
Funds Management Services in Australia industry analysis
Trading conditions have been challenging for fund managers, as fierce competition has resulted in cost-cutting initiatives. In particular, actively managed funds have suffered from a substantial reduction in management fees. The ongoing price war in passive investment in the exchange traded funds (ETFs) market has exerted further downward pressure on margins. The COVID-19 pandemic, geopolitical tensions, inflationary pressures and subsequent interest rate hikes led to significant uncertainty and volatility in financial markets. This has negatively influenced the valuation of some securities, resulting in declines in AUM and higher withdrawal requests. Overall, fund management services revenue is expected to weaken at an annualised 3.5% over the past five years, including an anticipated dip of 2.3% in 2023-24, to total $11.0 billion.
The rise of environmental, social and governance (ESG), and thematic investing has strongly influenced funds management revenue in recent years. Investors are increasingly looking to invest in funds that align with their social and sustainability goals, prompting fund managers to launch new funds and offer methods like custom indexing to meet demand. This trend has opened the door for fund management companies to carve out market niches. Products like ESG funds and custom indexing also come with higher management fees, offsetting further margin declines from mounting competitive pressures.
Profit margins are on track to rise thanks to increased investment in ESG that will support growth in funds management services. Fund management companies are set to allocate more resources to ensure compliance with sustainability claims, amid the growing regulatory crackdown on greenwashing. The launch of the first ever set of global sustainability reporting standards will standardise ESG-related disclosures and enhance the credibility of sustainable funds. Emerging technologies like tokenisation and quantum computing, combined with the potential managed investment scheme reform in Australia, will revolutionise funds management in the coming years. These new forces and trends are why fund management revenue is forecast to expand at an annualised 3.8% through the end of 2028-29, to $13.3 billion.
Trends and Insights
- Global events like the COVID-19 pandemic and escalating geopolitical tensions have created economic uncertainties, resulting in a decline in AUM. Combined with interest rate hikes, these trends have weakened revenue generated from management fees.
- The global market has become more accessible, while the domestic stock exchange has shrunk, bolstering demand for overseas assets. That’s why fund managers are expanding their product ranges and improving capabilities for foreign market participation.
- New South Wales is home to many fund management companies. As Australia’s financial capital, Sydney is a natural hotspot for fund managers, as it provides easy access to high-income earners.
- Margins have been deteriorating due to stiff competition, driving funds management giants toward mergers and acquisitions to maintain dominance. This strategic shift, coupled with greater global expansion, is heightening market share concentration.
Industry Overview
Market size and recent performance (2014-2029)
Industry revenue has declined at a CAGR of 3.5 % over the past five years, to reach an estimated $11.0bn in 2024.
Trends and Insights
Intense competition has sparked lower fees and heightened consolidation
- Active fund managers have been facing intense competition in recent years, forcing firms to reduce their fees. Fund managers are competing to retain clients and attract new investors, putting downward pressure on the fee structure and weakening revenue.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2024-2029)
Market size is projected to grow over the next five years.
Trends and Insights
The wholesale threshold is set to change, boosting investors protection
- The wholesale client requirement has remained unchanged in Australia for over two decades, resulting in many Australians qualifying as wholesale investors. This has led to a gradual increase in funds from wholesale financial trusts over the past few years.
Biggest companies in the Funds Management Services in Australia
| Company | Market Share (%)
2024 | Revenue ($m)
2024 |
|---|---|---|
Macquarie | 3,750.9 | |
First Sentier Investors Holdings | 1,014.2 | |
IFM Investors | 617.3 |
To view the market share and analysis for all 4 top companies in this industry, view purchase options.
Products & Services Segmentation
Source: IBISWorld
Industry revenue is measured across several distinct product and services lines, including Deposits, Debt securities and Domestic equities. Deposits is the largest segment of the Funds Management Services in Australia.
Trends and Insights
Global market accessibility and a shrinking domestic securities exchange has propelled demand for overseas assets
- Overseas asset investments include both debt and equity securities. Fund managers have broadened their products and capabilities to offer more opportunities in foreign markets over recent years, substantially lowering barriers associated with purchasing overseas assets.
- More insights available in the full report
Widen you competitive advantage with related industries
Competitors
- There are no industries to display.
Complementors
- Life Insurance in Australia
- Superannuation Funds in Australia
- Investment Banking and Securities Brokerage in Australia
- Financial Planning and Investment Advice in Australia
International industries
- Portfolio Management in the US
- Funds Management and Other Investment Services in New Zealand
- Fund Management Activities in the UK
- Fund Management Activities in Ireland
- Securities Investment in China
Table of Contents
About this industry
Industry definition
Fund management service providers mainly provide funds management services, including insurance funds management, public offer unit trusts, government funds and overseas funds. Fund management services generate income by providing portfolio investment services and investment consultant services on a commission and fee basis. Providers also earn revenue on a performance fee basis, where fees are directly tied to the effective management and growth of client portfolios.
What's included in this industry?
DepositsDebt securitiesAustralian equitiesLand and buildingsOverseas assetsUnit trustsDerivativesCompanies
MacquarieFirst Sentier Investors HoldingsIFM InvestorsPurchase this report to view all 4 major companies in this industry.
Related Terms
CORPORATE COLLECTIVE INVESTMENT VEHICLE (CCIV)INSTITUTIONAL INVESTORSFUNDS UNDER MANAGEMENT (FUM)ASSETS UNDER MANAGEMENT (AUM)Industry Code
ANZSIC 6419 - Funds Management Services in Australia
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
Global events like the COVID-19 pandemic and escalating geopolitical tensions have created economic uncertainties, resulting in a decline in AUM. Combined with interest rate ...
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2014-2023) and forecast (2024-2029)
- Employees, including historical (2014-2023) and forecast (2024-2029)
- Businesses, including historical (2014-2023) and forecast (2024-2029)
- Profit, including historical (2014-2024)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
The global market has become more accessible, while the domestic stock exchange has shrunk, bolstering demand for overseas assets. That’s why fund managers are expanding thei...
In this chapter
- Products & Services
- Major Markets
Key metrics
- Largest market segment and value in 2024
- Product innovation level
Charts
- Products & services segmentation in 2024
- Major market segmentation in 2024
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
New South Wales is home to many fund management companies. As Australia’s financial capital, Sydney is a natural hotspot for fund managers, as it provides easy access to high...
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each region
- Share of population compared to establishments in each region in 2024
Tables
- Number and share of establishments in each region in 2024
- Number and share of revenue each region accounts for in 2024
- Number and share of wages each region accounts for in 2024
- Number and share of employees in each region in 2024
Detailed analysis
- Geographic spread of the industry across Asia Pacific, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
Margins have been deteriorating due to stiff competition, driving funds management giants toward mergers and acquisitions to maintain dominance. This strategic shift, coupled...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2019-2024
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
Delays in renewable energy projects have negatively affected funds management giants with holdings in the green energy sector. Difficult conditions in the green energy sector...
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2020 through 2024
- Major companies in the industry, including market share, revenue, profit and profit margin in 2024
- Overview of Macquarie's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of First Sentier Investors Holdings's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of IFM Investors's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of revenue, market share and profit margin trend for one additional company
Detailed analysis
- Description and key data for Macquarie, and factors influencing its performance in the industry
- Description and key data for First Sentier Investors Holdings, and factors influencing its performance in the industry
- Description and key data for IFM Investors, and factors influencing its performance in the industry
- Description, key data and performance trends for one additional company
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
Organisations like the Financial Services Council contribute to funds management services through policy influence, research and professional development programs. The counci...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2014-2029)
- Assistance historical data and forecast (2014-2029)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
Margins have come under pressure due to the growing popularity of cost-effective passive investments and strict regulations. Even so, ESG funds, which command a premium due t...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Investment vs. share of economy
Data tables
- Cash Flow & Debt Service Ratios (2014-2029)
- Revenue per Employee (2014-2029)
- Revenue per Enterprise (2014-2029)
- Employees per Establishment (2014-2029)
- Employees per Enterprise (2014-2029)
- Average Wage (2014-2029)
- Wages/Revenue (2014-2029)
- Establishments per Enterprise (2014-2029)
- IVA/Revenue (2014-2029)
- Imports/Demand (2014-2029)
- Exports/Revenue (2014-2029)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2014-2029)
- IVA (2014-2029)
- Establishments (2014-2029)
- Enterprises (2014-2029)
- Employment (2014-2029)
- Exports (2014-2029)
- Imports (2014-2029)
- Wages (2014-2029)
Methodology
How are IBISWorld reports created?
IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.
Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in Australia include:
- Australian Bureau of Statistics
- Australian Taxation Office
- Australian Securities & Investments Commission
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.
Learn more about our methodology and data sourcing on the Help Center.
Frequently Asked Questions
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Funds Management Services industry in Australia in 2024?
The market size of the Funds Management Services industry in Australia is $11.0bn in 2024.
How many businesses are there in the Funds Management Services in Australia industry in 2024?
There are 431 businesses in the Funds Management Services industry in Australia, which has grown at a CAGR of 2.8 % between 2019 and 2024.
Has the Funds Management Services industry in Australia grown or declined over the past 5 years?
The market size of the Funds Management Services industry in Australia has been declining at a CAGR of 3.5 % between 2019 and 2024.
What is the forecast growth of the Funds Management Services industry in Australia over the next 5 years?
Over the next five years, the Funds Management Services industry in Australia is expected to grow.
What are the biggest companies in the Funds Management Services market in Australia?
The biggest companies operating in the Funds Management Services market in Australia are Macquarie, First Sentier Investors Holdings and IFM Investors
What does the Funds Management Services in Australia include?
Deposits and Debt securities are part of the Funds Management Services industry.
Which companies have the highest market share in the Funds Management Services in Australia?
The company holding the most market share in Australia is Macquarie.
How competitive is the Funds Management Services industry in Australia?
The level of competition is high and increasing in the Funds Management Services industry in Australia.
