Global professional services firm Towers Watson recently published the PI/Towers Watson Global 500 Research and Ranking for 2014. The new report highlights that AUM for the asset management industry increased by a solid 2.1% in 2014, moving up from $76.4 trillion in 2013 to $78.1 trillion last year.

 

Asset managers or asset management growth in AUM or assets under management by location - Europe vs USA and Japan 2004-2014That said, the research also shows that AUM growth is clearly slowing down, and the asset management sector is likely to be facing significant challenges both in terms of macroeconomics and a changing global perspective on the value proposition offered by funds.

Fund Industry

As Luba Nikulina, TW Global Head of Manager Research, points out in her Foreword to the November 2015 report: “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.”

Fund Industry

Fund industry highlights from the PI/Towers Watson Global 500 Research and Ranking for 2014

A few highlights from the PI/Towers Watson Global 500 Research and Ranking for 2014 report on the fund industry include:

  • Total assets under management of the 500 managers in the ranking came to US$78.1 trillion at the end of 2014, an increase of 2.1% from the end of 2013.
  • BlackRock held on to the title of the largest asset manager in 2014, and now has led the rankings for five consecutive years. Vanguard stayed in the second spot while State Street has moved up by one, dropping Allianz from third to fourth position.

Fund Industry

  • AUM for North American firms hit US$44.5 trillion at the end of 2014, up 5.8% from the prior year. Assets managed by European firms declined by 1.5% to US$25.9 trillion, this despite growth of 18.6% from UK-based firms boosting assets to US$6.8 trillion. Of note, Japanese managers ended 2014 with US$3.9 trillion, a decline in AUM of 14.4% during 2014.
  • The top 20 managers’ share of total assets moved up from 41.0% to 41.6%, totaling US$32.5 trillion. The bottom 250 managers’ share of total assets appreciated from 5.7% to 6.0%, coming to a total AUM of US$4.7 trillion. U.S. managers in the top 20 represented 65.5% of total AUM, while European managers totaled up to 34.5%.
  • Independent asset managers did well last year, with nine of the top 20 ranked members. Banks came in second with eight members of the top 20, and only three managers in the top are owned by insurance firms.
  • AUM of managers from developing countries moved up notably from 3.0% in 2013 to 3.4% in 2014.
  • The majority of assets are actively managed, and active assets grew at a slower rate than passive assets in 2014.
  • The traditional asset classes of equity and fixed income still represent the majority of assets in the fund industry: 79.4% of all assets (45.3% equity, 34.1% fixed income), a boost of 12.3% in 2014 to US$37.3 trillion.