A recovery in assets
managed by the world’s largest asset managers that got off to a
flying start in 2009 and continued at a slower pace in 2010 has
favoured the largest players. While banks dominate the top 20
rankings, insurers such as Allianz are proving to be significant
contenders for top-honours.
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Total assets under management
(AUM) by the world’s largest 500 fund asset managers inched ahead
in 2010, rising by 4.8% from $62bn at the end of 2009 to $65trn
according to a study by consultancy Towers Watson.
The increase in 2010 was well
below the 16% rise recorded in 2009, a year of strong recover
following a 23% slump in AUM in 2008. However, despite two years of
growth AUM at the end of 2010 were still below the all-time high of
$69trn at the end of 2006.
Towers Watson Investment’s
head of research, Craig Baker says the main beneficiaries of the
recovery in AUM since 2009 have been the 20 largest asset
managers.
“This was as a result of good
market returns, new inflows and performance fees which, combined
with reduced overheads, will have eased the pressure on asset
management firms,” says Baker.
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By GlobalData“While many would have moved
back into profitability during 2010, recent market gyrations and
the various sovereign debt crises could see these fortunes reversed
in 2011.”
Baker notes that in 2010 the
combined mar-ket share of AUM by the top 20 asset man-agers reached
its highest level since TowersWatson began to compile data 10 years
ago.
During the 10 years, AUM by
the top 20 managers almost doubled to $26.379trn at the end of 2010
and accounted for some 40% of total AUM by the top 500 asset
managers. If AUM of the next 30 biggest asset managers is included,
total AUM by the top 50 players rises to $40.9trn or just over two
thirds of AUM by the top 500 managers.
Baker also notes rapid
progress made by passive AUM. Since 2000 total passive AUM recorded
a 13% CAGR more than twice the 6% CAGR by the top 500 managers as a
whole.
Passive AUM grew by 9% in
2010 and stood at more than $8trn at year-end, the highest level
ever for this asset class.
“Investors have continued to
move significant assets to passive houses over the years as
institutions have found new ways to provide access to markets at
low cost,” says Baker.
“Most investors still rely on
actively managed assets, as a core part of their portfolios to
provide them with some of the additional return they need to repair
deficits or grow in a low return environment.
“However, passive assets –
including new ways of doing passive – are likely to continue
growing given their inherent appeal and suitability for the
majority of investors.”
Bank-owned managers
dominate
Across the top 20 asset
managers, those owned by banks were in the majority. Specifically,
there were 16 bank-owned managers among the top 20 with AUM of
$21.467trn.
US-based Black Rock held sway
in first position with AUM of $3.561trn to give it a market share
of 5.5% amongst the top 500 managers. Black Rock has risen rapidly
through the ranks of asset managers since 2005 when it occupied
32nd position in Towers Watson’s study.
Boosting Black Rock’s AUM has
been a series of acquisitions which began with Merrill Lynch
Investment Managers in 2005. Other notable acquisitions included
Quellos in 2007 and Barclays Global Investors in 2009.
Of the remaining four
positions amongst the top 20 asset managers in 2010 all were filled
by insurance companies: Allianz, AXA, Prudential Financial and
Nippon Life. Allianz’s AUM of $2.009trn ranked it third overall and
only marginally behind second-ranked State Street Global. The
margin separating the two was a mere $498m.
Insurers become more prominent across the top 50 asset
managers, occupying 17 positions in total.
