CANADA ASSET MANAGEMENT MARKET - GROWTH, TRENDS, AND FORECAST (2019 - 2024)

The Canada Asset Management Market is segmented by Asset Class, Source of Funds, Type of Asset Management Firms, and Revenue by Type of Asset Management Firms.

Market Snapshot

Market Snapshot
Study Period:

2012-2024

Base Year:

2018

Key Players:

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Market Overview

The Canadian asset management market registered a CAGR of 7.54% during the period, 2012 – 2017.

  • The Canadian industry is expected to grow at a faster rate to CAD 400 billion by 2024.  The Canadian ETF market grew to CAD 156 billion (AUM), with inflows of CAD 20 billion. The Canadian equity ETF with the most inflows in 2018 was BMO S&P/TSX Capped Composite Index ETF (ticker: ZCN), with more than CAD 1 billion in net flows. 
  • In 2018, PE managers remained active, closing 324 PE transactions worth CAD 52.0 billion. With fewer than 500 VC financings closed, VC deal value still managed a record high of CAD 3.8 billion. PE sellers completed CAD 35.2 billion worth of exits in 2018. Fundraising lagged for both asset classes, with only two PE vehicles and three VC vehicles closing, indicating a potential resetting of the fundraising cycle.
  • The factors that drive the growth of the market are rising interest rates and platformification. A steady influx of new competitors and investing alternatives are driving Canadian asset managers to invest in new innovative technologies for enhancing operations through technology and to improve the client experience. Reducing financial stress is a growing focus for players across the asset management industry in Canada. 

Scope of the Report

The Canadian asset management market covers different segments of asset management, like fixed income, equities, pension, alternative, and hybrid fund, along with insights on return generated by different asset classes and asset management process flow.

Asset Class (2012-2018)
Equity
Fixed Income
Alternative Investment
Hybrid
Cash Management
Source of Funds (2012-2018)
Pension Funds and Insurance Companies
Retail Investors
Institutional Investors
Government/Sovereign Wealth Fund
Others
Type of Asset Management Firms (2012-2018)
Large Financial Institutions/Bulge Brackets Banks
Mutual Funds and ETFs
Private Equity and Venture Capital
Fixed Income Funds
Hedge Funds
Managed Pension Funds
Others

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Key Market Trends

The Canadian Industry to See Even Faster Growth than the Global ETF Industry

The global ETF industry is projected to double to more than USD10 trillion by 2024. The Canadian industry is expected to grow at a faster rate to CAD 400 billion by 2024.  The Canadian ETF market grew to CAD 156 billion (AUM), with inflows of CAD 20 billion. The Canadian equity ETF with the most inflows in 2018 was BMO S&P/TSX Capped Composite Index ETF (ticker: ZCN), with more than CAD 1 billion in net flows. 

Investors continued to show support to broad Canadian equity exposure, especially to financials and energy, as Canada has underperformed in the leading global markets. Investors consider ETFs as an effective, transparent, and low-cost asset allocation tool. The diversification and trading efficiency that ETFs offer has become more important than ever, as volatility has returned to the global markets. The value of positioning with traditional passive ETFs and new active ETFs was evident during the market corrections in the fourth quarter.

BMO Global Asset Management offers 77 mandates and has a market share of 31% in Canada. There has been a trend toward short-dated fixed income ETFs. Tactical trading and repositioning within fixed income using ETFs have become popular strategies. Although ETFs are now a mainstream option, they still only represent 10% of the assets under management of the mutual fund industry in Canada. 

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Outlook for the Canada Economy and Investment Management Industry

Both the Canada economy and the Canada stock market have not been performing well. As interest rates in 2018 were increasing, the quantum of increase in interest rates has been effecting the performance of the Canada economy and the stock markets. Sustained higher interest rates could hamper asset price growth, hence hampering the returns provided by financial asset managers. Investment managers have already been struggling in a period of low expense ratios and higher operating costs, and hence consolidation is expected in the market. However, an improved economy may lead to more disposable income and better profits for companies. This, in turn, may help investment managers increase fees and income. With increasing household interest rates, there is a possibility of shift of smaller consumers to high return financial product at low-cost margin to meet the financial requirements. However, currently a wave of consolidation is expected in the market, as the market is highly competitive due to disruptions caused by technological changes and dynamic consumer/retail investor behavior.

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Competitive Landscape

The Canadian asset management market is highly competitive, with the presence of major international players. The market studied presents opportunities for growth during the forecast period, which is expected to further drive the market competition. With multiple domestic players holding significant shares, the market studied is competitive.

Major Players

  1. RBC Group
  2. TD Asset Management Inc.
  3. BlackRock Asset Management Canada Ltd
  4. CIBC Asset Management Inc.
  5. Fidelity Canada Institutional

* Complete list of players covered available in the table of contents below

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Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET INSIGHTS AND DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Dynamics

      1. 4.2.1 Drivers

      2. 4.2.2 Restraints

      3. 4.2.3 Opportunities

    3. 4.3 Technological Innovations

    4. 4.4 Industry Policies and Government Regulations

    5. 4.5 Trends Disrupting the Market

    6. 4.6 Insights on Return Generated by Different Asset Classes

    7. 4.7 Asset Management Process Flow

    8. 4.8 Insights on Fee Structure and Operating Cost

  5. 5. MARKET SEGMENTATION

    1. 5.1 Asset Class (2012-2018)

      1. 5.1.1 Equity

      2. 5.1.2 Fixed Income

      3. 5.1.3 Alternative Investment

      4. 5.1.4 Hybrid

      5. 5.1.5 Cash Management

    2. 5.2 Source of Funds (2012-2018)

      1. 5.2.1 Pension Funds and Insurance Companies

      2. 5.2.2 Retail Investors

      3. 5.2.3 Institutional Investors

      4. 5.2.4 Government/Sovereign Wealth Fund

      5. 5.2.5 Others

    3. 5.3 Type of Asset Management Firms (2012-2018)

      1. 5.3.1 Large Financial Institutions/Bulge Brackets Banks

      2. 5.3.2 Mutual Funds and ETFs

      3. 5.3.3 Private Equity and Venture Capital

      4. 5.3.4 Fixed Income Funds

      5. 5.3.5 Hedge Funds

      6. 5.3.6 Managed Pension Funds

      7. 5.3.7 Others

    4. 5.4 Revenue by Type of Asset Management Firms (2015-2024)

  6. 6. COMPANY PROFILES

    1. 6.1 RBC Group

    2. 6.2 TD Asset Management Inc.

    3. 6.3 BlackRock Asset Management Canada Ltd.

    4. 6.4 CIBC Asset Management Inc.

    5. 6.5 Fidelity Canada Institutional

    6. 6.6 CI Investments Inc. (including CI Institutional Asset Management)

    7. 6.7 Mackenzie Investments

    8. 6.8 1832 Asset Management LP (Scotiabank)

    9. 6.9 Manulife Asset Management Ltd

    10. 6.10 Brookfield Asset Management Inc.*

  7. *List Not Exhaustive
  8. 7. FUTURE OF THE CANADIAN ASSET MANAGEMENT MARKET

  9. 8. APPENDIX

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