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Swiss asset managers hence offer two things: active management and performance. The promise is born out in the statistics: only 2 percent of Swiss asset managers are exclusively passive, while 17 percent offer a combination of active and passive. The vast majority is dedicated to an active investment strategy and a performance-related business model.

The Swiss asset management industry is clearly fighting tooth and nail against the boom at passive index and exchange-traded-funds instruments. That also has structural reasons though.

A Diverse Set of Products

The offering of Swiss asset managers is fairly diverse. The companies provide standard products with investments in equities and bonds, but they also have a broad range of specialized products in multi-asset, commodities, real estate, private equity, infrastructure, hedge funds, disaster bonds and much more.

Focusing on specialist products is a profitable exercise because it makes the acquisition of new clients easier. It also reduces the fierce competitive pressure under which large standard providers such as Aberdeen Standard, Fidelity and Schroders have been working in recent years.

Higher Margin Business

The specialized asset managers also tend to generate a higher margin. The alternative providers tend to have a higher margin than the passive funds, but also than actively managed portfolios.

Their strategy helps them generate a higher profitability rate. Zug-based Partners Group for instance, a company that manages some 70 billion francs, has a market cap of 19 billion.

Blackrock, the biggest asset manager, with $6.3 trillion in assets, has a valuation of $87 billion. Blackrock may have assets of 85 times those of Partners Group. But the latter enjoys more support on the stock market, with the U.S. firm only worth four times as much as the Swiss.

Special Products Pay Off

In other words, specialization in wealth management, something that requires know how provided by human capital, is worth more than the mass market business, which is fighting for margins in a brutal competition.

Iwan Deplazes, the chairman of the Swiss Asset Management Platform, recently told finews.com that Swiss providers had to make sure to stand out, to sharpen their profile. In the alternative investment business, sheer size isn’t all. Special  products and hard work to keep ahead of the pack is what counts.

The Asset Management Platform is an industry organization dedicated to further the interests of its member companies.