Consolidation – the fast track to scalable efficiency in asset management

Consolidation is not just a trend—It's a strategic imperative 

From M&A mega-deals to vendor rationalisation, consolidation is rewriting the rules of operational success in asset management. In 2024 alone, the investment industry saw record-breaking deal activity. The fourth quarter logged the highest number of M&A deals in a single quarter ever recorded. This wasn’t coincidence—it was necessity. Firms are under pressure to reduce cost, improve scalability, and deliver better client outcomes—at speed. And consolidation has emerged as a proven way to do just that. 

Why consolidation now? 

The drivers are clear and compounding: 

• Margins are thin. Even the largest firms are struggling to sustain profitability as client fees fall and compliance costs rise. 
• Complexity is high. As firms expand across asset classes, jurisdictions, and regulatory regimes, the cost of maintaining siloed operations grows exponentially. 
• Investors are consolidating too. Institutional clients want to do more business with fewer managers—those with scale, breadth, and digital sophistication. 
• The industry is responding in kind. Consolidation isn’t just about survival. It’s about creating operating models that are built to scale efficiently. 

What does consolidation look like? 

It’s broader than just M&A. There are three types of consolidation that smart firms are pursuing: 

1. Strategic M&A 

Large asset managers are acquiring smaller, specialised firms to build multi-asset capabilities, enter new markets, or integrate alternative strategies. This allows them to: 

• Expand faster than organic growth would allow 
• Consolidate overlapping platforms and teams 
• Achieve cost synergies through shared infrastructure 
• BCG research shows that firms with the highest AUMs (>$300bn) are pulling ahead operationally—not just because of size, but because of how they consolidate and integrate. 

2. Vendor rationalisation 

Many asset managers work with dozens of data vendors, reporting tools, and document providers. Each brings complexity, contractual overhead, and integration friction. 

Firms are now bundling services with fewer, more strategic providers—particularly in areas like: 

• Fund document production (KIIDs, factsheets, ESG disclosures) 
• Regulatory reporting 
• Fund data dissemination and distribution 
• The result? Lower costs, better consistency, and faster speed-to-market. 

Industry benchmark: Consolidating fund reporting and dissemination with a single vendor yield min 20% cost savings and significantly fewer errors. 

3. Internal consolidation 

Even without M&A or vendor changes, firms are realising the value of internal consolidation—centralising teams, standardising processes, and eliminating duplication across: 

• Data management 
• Compliance workflows 
• Document creation
• Onboarding and lifecycle support 
• For firms without the scale (or appetite) for M&A, internal consolidation is the most immediate and controllable path to efficiency.

Consolidation drives both cost reduction and growth 

One of the most powerful misconceptions in the industry is that consolidation is only about cost-cutting. 

In truth, it’s equally about growth enablement. 

By consolidating platforms and processes, asset managers gain: 

• Speed: Faster product launches, faster compliance, faster client servicing 
• Confidence: Single sources of truth reduce risk and regulatory exposure 
• Scalability: As AUM grows, costs don’t rise proportionally 
• Focus: Talent can be redeployed from manual work to value-add activities 

And clients notice. Firms with streamlined, digital-forward operations are increasingly seen as safer, smarter partners by institutions and distributors.

The investor perspective 

It's not just operations teams demanding this change—investors are too. 

Large institutions are concentrating allocations with fewer managers. Why? Because they trust firms that can offer: 

• Integrated reporting 
• Cross-asset visibility 
• ESG and regulatory transparency 
• Strong operational controls 

Being perceived as “fit for purpose” operationally is now a competitive differentiator, looking for partners that can scale.

Consolidation as a culture shift 

To fully embrace consolidation, firms need to adopt a new mindset: 

• "Best of breed" no longer means 10 vendors. It means integrated capability. 
• Legacy ways of working need to be challenged. Even long-standing manual workflows can be reimagined. 
• Platform thinking matters. Infrastructure that connects data, teams, and compliance creates agility. 

Leaders must ask not just what can we cut? —but what should we streamline, integrate, or eliminate entirely? 

The takeaway: simpler is smarter 

Consolidation is no longer about empire-building—it’s about building lean, connected, scalable firms. 

Whether through M&A, vendor rationalisation, or internal restructuring, the message is the same:  Consolidation is the fast track to scalable efficiency. 

And in a market where speed, accuracy, and cost control define success, firms that fail to consolidate will simply fall behind. 

Want to learn how top firms are transforming their operating models? 

Download our latest whitepaper, Navigating Uncertainty, and discover the strategies leading asset managers are using to simplify operations, reduce cost, and future-proof their business.