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PwC projects 9.1% further fall in profit per AUM

Nearly half of surveyed managers spend at least half their technology budget on legacy systems, PwC reports, leaving less for AI and private markets.

At a glance

  1. Forty-six percent of surveyed managers spend at least half their technology budget maintaining legacy systems, and 29% spend more than two-thirds that way.
  2. For fund selectors, the 46% figure is a due-diligence question: how much of a manager's technology budget keeps legacy systems running?
  3. Fee compression already constrains that spending: 22% of research respondents said it significantly constrains infrastructure investment, and a further 37% reported a moderate impact.

PwC projects profit per dollar of assets under management will fall another 9.1% by 2030, after a 19% decline since 2018, Institutional Asset Manager reported.

Forty-six percent of surveyed managers spend at least half their technology budget maintaining legacy systems, and 29% spend more than two-thirds that way. PwC says layering new cloud, AI and digital tools onto legacy systems can undermine earlier technology investment.

For fund selectors, the 46% figure is a due-diligence question: how much of a manager's technology budget keeps legacy systems running? The rest must cover the AI and private-markets expansion PwC says managers are under pressure to deliver.

Fee compression already constrains that spending: 22% of research respondents said it significantly constrains infrastructure investment, and a further 37% reported a moderate impact.

Profit per dollar of AUM: 2018 = 100

PwC projects a further 9.1% decline by 2030 on top of the 19% already lost since 2018

100 index, 2018 = 100201881 index, 2018 = 100Now73.6 index, 2018 = 1002030 (projected)100 index, 2018 = 100201881 index, 2018 = 100Now73.6 index, 2018 = 1002030 (projected)100 index, 2018 = 100201873.6 index, 2018 = 1002030 (projected)
Source: PwC Asset Management Infrastructure report, via Institutional Asset Manager
Show as table
LabelValue (index, 2018 = 100)
2018100 index, 2018 = 100
Now81 index, 2018 = 100
2030 (projected)73.6 index, 2018 = 100

Reported by the Manager Selection desk from Institutional Asset Manager and PwC, Asset Management Infrastructure: Rethinking the industry's piping. Published . Corrections

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