U.S. asset managers increased their share of assets from 41%
to over 50% during past decade
Assets managed by the world’s 500 largest fund managers rose by
almost 12% to reach a record $76.5 trillion in 2013, surpassing the
previous high of over $69 trillion set in 2007. The Pensions &
Investments/Towers Watson World 500 research shows that due to
consistent growth of assets in the past six years, total assets
have now more than doubled since 2002.
“The year 2013 was clearly another good one for most large asset
managers, regardless of the types of assets under management,
resulting in new records across the board,” said Brad Morrow, head
of research in the Americas at Towers Watson Investment. “While the
industry looks healthy, there is no room for complacency given
numerous ongoing challenges, including the medium-term outlook for
the global economy, where we see risks to global growth skewed to
the downside. In addition, asset managers, particularly large ones,
are increasingly likely to come under scrutiny for their role in
society and the value they add to investors’ portfolios net of
fees.”
The research, conducted in conjunction with Pensions &
Investments, a leading U.S. investment newspaper, reveals that in
the past 10 years, the number of independently owned asset managers
in the top 20 has more than doubled and now accounts for the
majority, overtaking bank- and insurer-owned firms, which have both
declined in the same period. In 2013, there were 12 U.S.-based
managers in the top 20, accounting for two-thirds of all assets,
with the remaining managers all being Europe-based.
“The shape of the asset management industry has changed
significantly in the past decade, with fewer bank-owned managers in
existence, as they have been forced to focus on the pressing issues
of risk reduction and capital adequacy. As such, during this time,
there have been a number of high-profile sales that have impacted
where assets are domiciled, and the U.S. has been the biggest
beneficiary of this trend,” said Morrow.
According to the research, U.S. asset managers have increased
their share of assets from 41% to over 50% during the past decade,
mainly at the expense of Swiss, Japanese and U.K. asset managers,
which have lost around 5%, 4% and 2% of market share, respectively,
and now have 4%, 6% and 8%, respectively.*
Since 2003, assets managed by the leading passive managers have
grown by over 12% annually, compared to around 6% annually for the
top 500 managers as a whole. In 2013, assets managed by the leading
passive managers grew by over 16% to reach a record high of over
$10 trillion, up from $3 trillion a decade ago.
“The growth of passive assets globally is a direct result of
more institutional investors acknowledging that success in active
management without significant governance capability is less likely
because of increased competition for seemingly ever-diminishing
returns,” said Morrow. “At the same time, there has been
significant innovation in the passive space, which has resulted in
many low-cost, systematic approaches across a range of asset
classes also known as smart beta. When we coined the phrase,
it was in the context of targeting beta opportunities smartly, but
has since become an industry buzzword for all sorts of inexpensive,
passive products. So we would caution investors to look very
carefully at some of these product claims and not forget that there
is no substitute for real investment skill and good active
management.”
Some of the main gainers by rank in the top 50 (including those
achieved through mergers or acquisitions) during the past five
years include Schroder Investment management (+44 [87→43]),
Affiliated Managers Group (+43 [81→38]), Royal Bank of Canada (+28
[77→49]), T. Rowe Price (+27 [54→27]) and Sumitomo Mitsui Trust
& Bank (+26 [59→33]).
The world’s largest money managers
Ranked by total assets under management as of Dec. 31, 2013
Rank
Manager Country Total assets 1
BlackRock U.S. $4,324,088 2 Vanguard
Group U.S. $2,752,919 3 Allianz Global
Investors Germany $2,392,531 4 State Street
Global U.S. $2,344,789 5 Fidelity Investments
U.S. $2,159,845 6 J.P. Morgan Chase
U.S. $1,601,983 7 Bank of New York Mellon U.S.
$1,582,982 8 AXA Group France
$1,532,156 9 Capital Group U.S. $1,338,805 10
BNP Paribas France $1,325,176 11
Deutsche Bank Germany $1,270,602 12 Prudential
Financial U.S. $1,107,029 13 UBS
Switzerland $1,095,904 14 Amundi France
$1,069,771 15 Goldman Sachs Group U.S.
$1,042,000 16 HSBC Holdings U.K. $ 921,000 17
Northern Trust Asset Mgmt. U.S. $ 884,473 18
Franklin Templeton U.S. $ 879,139 19
Natixis Global Asset Mgmt. France $ 867,193 20
Wellington Mgmt. U.S. $ 834,405
Source: P&I/Towers Watson World 500
For more data and information from related Towers Watson
Investment research please click here.
Towers Watson Investment
Towers Watson Investment is focused on creating financial value
for the world’s leading institutional investors through its
expertise in risk assessment, strategic asset allocation, fiduciary
management and investment manager selection. Towers Watson’s
Investment business has over 800 associates worldwide, assets under
advisory of over $2.2 trillion and around $65 billion of assets
under management.
About Towers Watson
Towers Watson (NYSE, NASDAQ:TW) is a leading global professional
services company that helps organizations improve performance
through effective people, risk and financial management. With
15,000 associates around the world, the company offers consulting,
technology and solutions in the areas of benefits, talent
management, rewards, and risk and capital management. Learn more at
towerswatson.com.
*Market share is influenced by currency movements during the
period.
Media:Ed Emerman,
609-275-5162eemerman@eaglepr.comorBinoli Savani,
703-258-7648binoli.savani@towerswatson.com
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