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Asset growth slows for world’s largest managers
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[/et_pb_image][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”] Dania Zinurova [/et_pb_text][/et_pb_column][et_pb_column type=”1_2″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]
Assets managed by the world’s largest 500 fund managers rose by a little over just 2 per cent in 2014 to reach US$78.1 trillion, compared to US$76.4 trillion the year before
The annual Pensions & Investments/Towers Watson World 500 research shows that asset managers have added almost US$30 trillion globally since 2004, despite growth slowing to its lowest rate for a decade.
Dania Zinurova, senior investment consultant, Manager Research Diversifying Strategies at Towers Watson Australia, said: “Despite a challenging environment, the 20 largest Australian asset managers grew assets under management by 5 per cent to just over US$1 trillion during 2014.
“While the size of assets under management was broadly flat from 2004 to 2009, we saw growth from 2009 to 2014 in Australia which, to some extent, could be explained by interest from foreign investors in our market, particularly those looking for opportunities in real estate, infrastructure and natural resources as well as relatively stable economic conditions. The size of assets managed for Australian clients (both domestically and globally) was relatively stable between 2010 and 2012 and has been increasing slightly since 2012, an indication perhaps that asset managers continue to diversify their client-bases globally and attract more Australian investors.
“For the first time we have observed asset growth at the very large and smaller ends of the size spectrum, but not much in the middle. The big passive houses are the beneficiaries at the large end, while smaller managers are attracting a greater proportion of active mandates as they ‘resource up’ and become more competitive.”
The research, conducted in conjunction with Pensions & Investments, a leading US investment newspaper, reveals that in the past ten years the number of independently owned asset managers in the top 20 has more than doubled and now accounts for the majority, overtaking both bank and insurer-owned firms, which have both declined in the same period. In 2014, there were 11 US-based managers in the top 20 accounting for nearly two-thirds of all assets with the remaining managers all being European-based.
Zinurova said: “We are in the longest period of (almost) uninterrupted asset growth since the research began, albeit growth has slowed dramatically recently. However, headwinds persist not only from markets and the medium-term outlook for the global economy but also regarding asset management’s perceived value proposition and its general role in society. This challenging environment also presents an opportunity for innovative and adaptable investment companies to stand out and we have seen greater flexibility and willingness to engage on these issues than ever before. This is not only welcome, but essential – otherwise the industry is likely to have change thrust upon it.”
According to the research, traditional assets make up almost 80 per cent of reported assets (45 per cent in equity, 34 per cent in fixed income), an increase of about 12 per cent from the previous year. Since 2004, assets managed by the leading passive managers have also grown by almost 13 per cent annually compared to around 5 per cent annually for the top 500 managers as a whole. In 2014 assets managed by the leading passive managers grew by around 12 per cent to reach a record high of over US$15 trillion, up from around US$4.6 trillion a decade ago.
Zinurova said: “It is hardly surprising that passive managers continue to attract institutional assets at such a rate, given the competition for seemingly ever-diminishing returns as well as significant innovation in the passive space. However we would caution investors to look very carefully at some of these passive product claims, and to not forget that – governance permitting – it is no substitute for real investment skill and good active management.
“In Australia we see growing interest in alternative investments with some investors increasing their strategic asset allocation targets to private equity, real estate and infrastructure in the search for income returns, potential inflation linkage and diversification benefits. In addition, many large investors have now a stronger preference for co-investments, ‘club-deal arrangements’ and separate mandates. This is driven by their desire to have more control over their investments and also to invest in a more cost-efficient way.”
Some of the main gainers by rank in the top 50 (including through mergers or acquisitions) during the past five years include Macquarie Group, Sumitomo Mitsui Trust Holdings, Affiliated Managers Group, Dimensional Fund Advisors and Aberdeen Asset Management.
The World’s Largest Money Managers.
Ranked by total assets under management, in US millions, as of December. 31, 2014
| Rank | Manager | Country | Total assets |
| 1 | BlackRock | US | $4,651,896 |
| 2 | Vanguard Group | US | $3,148,496 |
| 3 | State Street Global | US | $2,448,112 |
| 4 | Allianz Group | Germany | $2,189,296 |
| 5 | Fidelity Investments | US | $1,974,077 |
| 6 | J.P. Morgan Chase | US | $1,748,849 |
| 7 | Bank of New York Mellon | US | $1,710,282 |
| 8 | AXA Group | France | $1,491,394 |
| 9 | Capital Group | US | $1,396,777 |
| 10 | Deutsche Bank | Germany | $1,262,884 |
| 11 | Goldman Sachs Group | US | $1,178,000 |
| 12 | Prudential Financial | US | $1,175,947 |
| 13 | UBS | Switzerland | $1,158,763 |
| 14 | BNP Paribas | France | $1,114,595 |
| 15 | Legal & General Group | UK | $1,077,425 |
| 16 | Amundi | France | $1,052,587 |
| 17 | HSBC Holdings | UK | $954,000 |
| 18 | Northern Trust Asset Mgmt. | US | $934,100 |
| 19 | Wellington Mgmt. | US | $913,720 |
| 20 | Natixis Global Asset Mgmt. | France | $890,030 |
Source: P&I/Towers Watson World 500
Australia’s Largest Fund Managers
Ranked by total assets under management, in US millions, as of December 31, 2014
| Rank | Manager | Total assets | Overall rank |
| 1 | Macquarie Group | $370,288 | 50 |
| 2 | Commonwealth Bank Group | $156,278 | 100 |
| 3 | AMP Capital | $123,544 | 119 |
| 4 | Westpac Banking | $72,590 | 163 |
| 5 | QIC | $57,770 | 190 |
| 6 | Challenger | $46,653 | 223 |
| 7 | IFM | $45,675 | 225 |
| 8 | Magellan Asset Management | $25,794 | 312 |
| 9 | Perpetual | $25,189 | 317 |
| 10 | Goodman Group | $21,859 | 340 |
| 11 | Platinum Asset Management | $20,978 | 344 |
| 12 | Vinva Investment Management | $16,312 | 378 |
| 13 | Perennial Investment | $15,334 | 388 |
| 14 | Dexus | $14,926 | 394 |
| 15 | GPT Group | $14,763 | 397 |
| 16 | Lend Lease | $14,192 | 401 |
| 17 | Charter Hall | $9,380 | 468 |
| 18 | RARE Infrastructure | $9,000 | 477 |
| 19 | JCP Investment Partners | $8,671 | 487 |
| 20 | Cooper Investors | $8,156 | 499 |
Source: P&I/Towers Watson World 500
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