Top 500 asset managers reach new $131trn record

Written by Adam Cadle

17/10/2022

Assets under management (AuM) at the world’s 500 largest asset managers reached a new record of over US$131trn in 2021, according to new research published by Thinking Ahead Institute.

The latest figure is an increase of over 10% on the previous year, when assets had grown by 14.5% to over US$119trn.

The world’s top 20 asset managers are now responsible for over US$59trn of assets, having grown at an above-average annual rate of 13%. The research revealed that BlackRock is both the world’s largest asset manager and the first to exceed US$10trn. Vanguard Group ranked second (breaking the US$8trn mark), and Fidelity Investments and State Street Global ranked third and fourth respectively, each with around US$4trn.

US managers account for 15 out of the 20 largest firms and around 82% of these assets. As a result of consolidation and competition, 218 manager names which featured in the ranking ten years ago are now absent.

Passively managed funds grew by 12.1% during the year, faster than actively managed assets which grew at 9.5%, and now account for over 29% of assets – a record high. Equity and fixed income continued to make up the majority of assets, split by 46.5% and 33.9% respectively. In addition, cash makes up 6.6%, alternatives 5.9% and other strategies (LDI and specialist solutions) 7.1%.

Assets allocated to ESG principles increased b over four percentage points to reach over 60% of assets. Aggregate investment management fee levels decreased for a third of asset managers (29%) and increased for 13% of managers.

Marisa Hall, co-head of the Thinking Ahead Institute, commented: “Investment managers are facing a combination of long-term headwinds from macro-economic, geopolitical and climate risks – but are also spurred on by the driving factors of technology and industry innovation. This is a story of dark clouds on the horizon, potentially matched by a powerful engine room of innovation.

“Consolidation is an obvious symptom of a changing investment industry, but bigger is not always better. Specialism is still sought after with genuine boutiques and smaller global managers proving that standing out for the right reasons can be as strong a business model as offering standardisation.

“Asset managers are adapting as organisations and we’re seeing competitive pressures manifest in a reassessment of the skills and structures that drive success. For example, healthy scrutiny of sustainability claims is leading to enormous demand for climate and environmental specialists. Meanwhile, modern expectations for digital client service and a need for rigorous data-led investment processes is separately driving total re-evaluations of operational technology. These trends mean we’re not just seeing a shift in the rankings – but also a shift in what it means to be a successful asset manager.”

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