(Reuters) - The recent rally in the equity market will likely benefit U.S. asset managers, with most expected to exhibit quarter-over-quarter growth, Barclays said on Monday naming Invesco IVZ.N and Franklin Resources Inc BEN.N as their favorites in the group.
While the asset managers faced headwinds in 2011, sentiment going into 2012 appears to have improved, analysts at Barclays wrote.
Jefferies said most asset managers should see a healthy margin expansion given the speed of the equity market rally.
The brokerage sees Affiliated Managers Group Inc AMG.N, Blackstone Group LP BX.N, Invesco and T. Rowe Price Group Inc TROW.O as possible standouts, given their relative positioning and strong organic growth potential.
“As the capital markets hint at thawing out, Blackstone is well positioned in terms of back-log for both IPOs and secondary offerings,” Jefferies analyst Daniel Fannon wrote in a note to clients.
While the brokerage expects Legg Mason Inc LM.N to report its first “clean” quarter after its streamlining efforts, Janus Capital Group JNS.N may see its margins contracting from negative performance fees and higher long-term compensation.
However, Barclays’ analyst Roger Freeman said he is somewhat cautious over the near-term given the recent outperformance of the group and broader macro concerns going into the second quarter.
Reporting by Sharanya Hrishikesh in Bangalore; Editing by Supriya Kurane