Scorecard: Alternative vs Traditional Asset Managers

Lamb Quantitative Research (LQR) analyzed the performance between alternative and traditional asset managers over the period 2014-2024.

Results

• Alternative managers are more profitable - but have riskier capital profiles. They achieve the same RoE using more leverage.

  
  

• Traditional managers have delivered more value to clients at lower cost, and have achieved the same RoE using less leverage. (Client relevant metrics highlighted in orange).

  
  

So why do institutional clients keep reducing fixed income allocation in preference to alternative allocation? (See our previous post)

The incentives for the asset manager: the profit on a unit of alternative AuM is almost double that of traditional AuM.

Notes to the data:

All asset managers in the sample belong to the set of global, publicly listed asset managers. They managed 56% of global AuM at the end of 2024. Annualized data over the period 2014-2024 except where noted as '2024'. AuM growth values are volume weighted (v.w.), AuM margin values and profitability measures are mean of median by year.