Aggregate revenue rose to $49bn, up 15% from 1Q25, led by transactional and advisory fees, the sub‑$1m client tier, and AMER, with APAC close behind. Pre‑tax margin improved to 27%, from 25% a year earlier. AuM increased 19% y/y to $21tn.
Prompted by the war on Iran, managers are sharply de‑risking portfolios, with several lifting cash assets to 15% or more and warning that the economic fallout from the Strait of Hormuz disruption could be far worse than in recent crises.
Redemption requests across semi‑liquid private‑credit funds have exceeded quarterly limits, forcing major managers to gate vehicles. This has amplified negative sentiment, creating a feedback loop of further withdrawals, potential forced sales, and downward pressure on NAVs. Outflows are concentrated in Wealth and smaller institutions, while large institutional clients remain stable. More broadly, private credit is unlikely to pose systemic risk given its diversified exposures, limited leverage, and balanced balance sheets. The episode may ultimately resemble BREIT’s 2022–23 liquidity crunch—a prolonged gating period but no forced selling, followed by stabilisation and renewed growth—though lenders are tightening terms via higher rates and collateral markdowns. Quantitative investment strategies have become a major growth driver in wealth channels, giving affluent clients access to banks’ institutional‑grade, rules‑based trading without needing in‑house quant capabilities. Wealth managers now use QIS for systematic hedging, tax harvesting, and AI‑driven portfolio adjustments; scaled, QIS is a high‑margin, repeatable business that can pull wealth clients away from traditional discretionary management toward consistent, model‑driven solutions.