Nearly a decade after the collapse of Bear Stearns in the spring of 2008, financial institutions still remain one the least trusted sector. The global financial crisis opened an unprecedented era of ultra-low interest rates and tectonic regulatory changes that have been challenging for the entire wealth management community.
On the back of this scenario, many predicted that small players, such as external asset managers (EAMs) wouldn’t survive – but, contrary to expectations, their numbers grew. In fact, in Singapore alone the assets under management (AUM) by EAMs is estimated at around 5% of the total local AUM – which equates to US$100 to US$150 billion. This is quite a feat for an industry that was virtually non-existent 10 years ago in Asia. So who are these strange animals, EAMs, and why do they matter?