Active fund management isn't dead just yet

IT IS quite easy to do bad deals in asset management. Option one, overpay for a private capital business in the aggressive dash for growth. Option two, defensively merge your existing fund manager with a regional peer and botch the integration as you try to make savings.

Against that backdrop, Nomura Holdings’ decision to acquire a cheap US public-markets manager with minimal overlap stands as an oddity. Maybe there is some logic in buying what everyone else is trying to sell.

The investment industry’s well-known problem is that active fund management is trapped between low-fee passive funds and high-charging alternative strategies promising juicy returns, like hedge funds and private equity. This “barbell”, as Oliver Wyman’s Huw van Steenis named the phenomenon, is not easy to deal with if you are already a big active player.