Top fund managers’ assets rise to $68 trillion

Assets managed by the world’s largest 500 fund managers rose to $68trn in 2012, a rise of 8% on the previous year and bringing total assets almost back to the record level of $69trn in 2007, Towers Watson research has revealed.

The increase in assets in 2012 showed a marked contrast from the previous year, where assets fell by 3%. According to the research, asset levels are almost double that from 2002.

The Pensions & Investments/Towers Watson World 500 research showed that as of 31 December 2012, the fund manager with the largest total assets under management was BlackRock, with $3.8trn. Allianz Group was second, with almost $2.5trn of total assets. Vanguard Group and State Street Global came third and fourth, at just over $2.2trn and $2trn of assets respectively.

According to the research, European and US managers’ assets increased by 8% and 13% respectively, while Japanese managers’ assets decreased by 9% in 2012. There were 12 US-based investment managers in the top 20, managing over 64% of assets, while eight managers were European-based. Bank-owned asset managers continued to dominate the top 20, although the number of independent managers in the group remained static.

It was found that that US asset managers increased their share of assets in the research from 42% to 50% during the past 10 years, mainly at the expense of Japanese and Swiss asset managers who lost around 5% and 4% of market share and now have 7% and 4% respectively. The research also showed that large Canadian and French managers have both grown share by about 2% each during the same period.

Since 2002, passive assets have grown by over 13% annually, compared to 6% annually for the top 500 managers as a whole. In 2012 passive assets grew by over 12%, reversing the small decline the previous year.

According to Craig Baker, global head of research at Towers Watson Investment, as 2012 was a less volatile year, and combined with market rises, it was no surprise that most large investment managers gained assets. However, he added that while it is informative to look back over the past decade to see how assets have grown, “the real question to ask is how much value it has contributed to investors and end beneficiaries, and broader society, versus how many assets it has just gathered for itself during this time”.

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