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Friday 21 September 2018

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Largest 500 asset managers see first decline in assets since 2011

Written by Adam Cadle
31/10/2016

Assets managed by the world's largest 500 asset managers fell in 2015 for the first time since 2011, latest research published by Willis Towers Watson has shown.

Total assets under management were down 1.7 per cent to $76.7trn at the end of 2015, compared to $78.1trn the year before.

Assets managed by European managers, including the UK, decreased by 3.3 per cent, to $25.1trn. UK-based firms' assets decreased 2 per cent, reducing their AUM to $6.6trn.

Willis Towers Watson global head of manager research Luba Nikulina said: “The decline in global assets demonstrates the impact of the challenging investment landscape and currency fluctuations on asset managers across the globe. In 2014 our research showed a dramatic slowdown in growth, yet assets managed by the largest 500 managers still grew by just over 2 per cent.

"This year the figures are markedly different. The economic slowdown has impacted investment performance. At the same time, asset owners are rethinking their business models by internalising asset management capabilities at the larger end of the spectrum and consolidating at the smaller and mid-size end which also has an impact on capital flows to the industry. This trend will continue to put pressure on revenues and require asset managers to further adapt to this challenging and continuously changing environment.”

The research showed that traditional equity and fixed income still make up the majority of all assets (78.2 per cent: 45.4 per cent equity, 32.8 per cent fixed income), but they declined by 7.1 per cent during 2015. The only stand-out category in terms of growth in 2015 is alternative assets which grew by 25.1 per cent.

Nikulina said: “The increase in alternative assets shows that in an environment of low returns and increased uncertainty, investors are under pressure to identify other means of achieving more diversity and higher returns. This shift in strategy is both welcome and essential if the investment industry is to adapt to meet its current and future challenges. However the world of alternatives is much more complex than traditional bonds and equities so investors will need to focus on skill, holistic risk management and best in class implementation.”



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