Top 500 managers see assets hit record $119.5trn

Written by Adam Cadle

18/10/2021

Assets under management (AuM) at the world’s 500 largest asset managers have reached a new record of US$119.5trn, according to new research from the Thinking Ahead Institute.

As of the end of 2020, this represents an increase of 14.5% on the previous year when total AuM was previously US$104.4trn.

A growing concentration has been witnessed among the top 20 managers whose market share increased during the period to 44% of total assets. Of the top 500 managers, 221 names which featured on the list a decade ago in 2011 are now absent in 2021, demonstrating a quickening pace of competition, consolidation and rebranding.

BlackRock has retained its position as the largest asset manager in the ranking, followed by Vanguard holding its second place position for the seventh consecutive year. Of the top 20, 14 are US managers, accounting for 78.6% of the top 20 AuM. On the whole, passive investments represent 26%, an increase of 16.2% compared to a 15.4% growth in actively managed AUM. Asset managers have also been addressing the growing demand from more sophisticated asset owners, for more complex and tailored investment solutions.

Outsourced CIO, total portfolio approach (TPA) and ETFs have all been popular sources of growth for the world’s top managers, to meet clients’ increasing requirements for returns.

Roger Urwin, co-founder of the Thinking Ahead Institute, commented: “We have witnessed unprecedented change within the investment industry – accelerated dramatically by the pandemic. In particular, sustainability is no longer just a luxury for some firms. Instead, during the pandemic, asset managers from all corners of the world have became even more aware of the interconnectedness of the financial system with society and the environment.”

According to the research, passively-managed assets under management among the largest firms grew to a total of US$8.3trn in 2020, up from US$4.8trn in 2016.

Urwin added: “Asset managers have always had the ambition to develop and innovate. We have seen this particularly with ESG mandates, which increased by 40% in 2020. The biggest contributor to this was the growth in ESG ETFs.”

Aggregate investment management fee levels decreased for a quarter (25%) of the surveyed managers – but fee levels increased for 21% of managers.

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