The recent improvement in the equity markets has been good news for asset management companies that are buffeted by the economy's downturn, but in the view of some investment analysts it is too soon to become optimistic.

Several research notes published last week touch on the current climate for asset managers and see winners who will take the spoils while other firms struggle.

"From here, we see considerable consolidation, fewer players, a survival of the fittest, opportunities for the best companies to take share and a significant opportunity for increased savings, demographically induced," said analysts at Stifel Nicolaus Financial Corp., summing up the win-lose sentiment.

At Goldman, Sachs & Co., the target prices for asset managers' stocks were boosted 15% on average, but the firm kept its neutral valuation on the industry.

Though conditions are less bad than late last year, recovery is still some way off, it said.

"The operating environment saw some improvement in the first quarter as the pace of asset deterioration decelerated and on-balance-sheet investment marks were less severe compared to a brutal fourth quarter," the Goldman analysts wrote. "That said, earnings remained under pressure, with most firms under our coverage missing estimates, and the year-over-year earnings per share declined 54%.

"We believe that it will take several years for the group's earnings to recover to the 2006-2007 levels," they said. "While we are encouraged by some signs of stabilization, [current] multiples already anticipate a sharp recovery in earnings, which we do not think will happen, keeping us at neutral on the asset management space."

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