Asset manager valuation – science or art?

Rick Potter, Partner

To any investor familiar with other sectors the asset management business has some bewildering characteristics. On the one hand they are typically very simple businesses with very little balance sheet complexity, a small fixed cost base and a relatively small number of revenue streams which (at least in the case of those running funds) pay monthly with little or no credit risk giving the twin benefits of strong cash flow and very positive operating leverage.

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