Treasury Group expects to see more boutique manager shake-outs.
Boutique backer Treasury Group expects to see more fund managers selling their business or closing down over the next six months as markets remain volatile.
"We still think that, generally speaking, the industry has excess capacity," Treasury Group managing director Mark Burgess said.
"We wouldn't be surprised actually if we would see some consolidation in the shorter term."
The global financial crisis (GFC) and subsequent declines in funds under management have caused several fund managers to become unprofitable.
Most of those fund managers had held off selling the business for as long as they could, but were now starting to realise they could not go on for much longer, Burgess said.
"People have held in post-GFC for 12, 18 months, two years, that is three years or so [including the GFC] that they are holding in there," he said.
"We are beginning to see people who say: 'Look, really, it is time to shut up shop and close or consolidate'."
Especially in recent months, he said he had noticed an acceleration of that trend.
"Now, I'm prepared to say that we should see a bit of a rush in that," he said.
"We have seen a few deals here in Australia, recently, and we would be very surprised if we wouldn't see more consolidation in the next six months or so, particularly if the markets continue to soften."
Treasury Group had also noticed more firms wanted to sell equity to the company, he said.
"We have been approached by a large number of managers and groups that want to work with us," he said.
Discussions have been held with fixed income managers. Fixed income is one of the few major asset classes in which Treasury does not have a manager yet, but Burgess said it was hard to make it a viable business.
"We believe the economics of fixed income management are difficult for boutiques to deliver on," he said.
"In the last 12 months, we had our hands on fantastic fixed income managers who we had been looking to work with. But we thought they were better suited in a different style of environment than a boutique."
