(Corrects Reuters instrument code for DWS in 6th bullet point)
** JP Morgan says it has a constructive 2021 outlook for
European Asset Managers after the sector underperformed the
broader market in 2020
** According to JPM analysis, current share prices are
discounting an overly cautious outlook for assets under
management growth and margins
** The broker expects assets under management to see support
from both net inflows and markets, with costs the key area for
potential headwinds
** JPM flags the valuation gap between private market asset
managers (PMAM) and traditional asset managers, adding the
disparities are likely to persist as PMAMs are set to continue
to deliver higher growth and profitability as well as lower fee
margin compression
** Its top picks among PMAMs are Intermediate Capital Group
and Partners Group
** Of the traditional asset managers, JPM prefers the ones
offering a combination of good EPS growth and attractive
valuation and yield, i.e. Amundi, DWS,
Jupiter and Man Group
** It upgrades the latter to "overweight" from "neutral",
highlighting supportive fund flow outlook and greater stability
in net management fee margins
** It remains more cautious on Hargreaves Lansdown
and Ashmore, which trade at premium valuations despite
weaker earnings growth