The World’s Largest Asset Managers – 2024
The world’s 500 largest asset managers’ assets under management increased by 12.5 per cent to US$128 trillion in 2023, compared to $113.7 trillion at the end of 2022, according to a new report by WTW’s Thinking Ahead Institute.
It noted the annual growth rate represents a significant recovery from the major correction seen in 2022, when the total value of AUM dropped by $18 trillion.
According to the report, this is the first time passive investment strategies have accounted for more than a third (33.7 per cent) of total AUM.
Allocations to core equity (48.3 per cent) and fixed income (29 per cent) remained the dominant asset classes for institutional investors. The report noted the combined total for equities and fixed income marked a slight decrease (0.2 per cent) compared to the previous year as institutional investors have shown a renewed interest in alternatives like private equity and other illiquid assets.
North American asset managers accounted for nearly two-thirds (60.8 per cent) of total AUM with a total value of $77.8 trillion at the end of 2023. Asset managers located in the U.S. represented 14 of the top 20 managers overall, accounting for 80.3 per cent of assets.
In a press release, Jessica Gao, director at the Thinking Ahead Institute, said asset managers have experienced a year of consolidation and change despite a return to strong market performances.
“Macro factors have played a key part in the story, with notable highs in interest rates during 2023 exerting varied pressure on different asset classes, geographies and investment styles. As this now gradually switches to a rate cutting environment, equity markets are beginning to return positive performance also driven by improving expectations of earnings growth.”
Looking ahead, recent geopolitical events and several major elections have created uncertainties for asset managers, she added.
Last week, WTW's Thinkng Ahead Institute put out a press release stating the world's largest investment managers see assets hit $128 trillion in return to growth:
GLOBAL, Monday 21 October, 2024 – Total assets under management (AUM) at the world’s 500 largest asset managers reached USD 128.0 trillion at the end of 2023, according to new research from the Thinking Ahead Institute.
Despite not yet reaching 2021 levels, this amounts to 12.5% annual growth and marks a significant recovery from the major correction the year before (AUM dropped by $18 trillion in 2022).
The research also reveals the continued evolution of active vs. passive assets under management among the largest investment managers. For the first time, passive investment strategies now account for more than one third of AUM among the 500 largest firms (33.7%), though this still leaves almost two thirds of assets managed by the world’s largest managers in active strategies.
Asset class allocations have also evolved, with renewed growth of private markets. Core equity and fixed income remain the dominant asset classes, comprising 77.3% of total AUM (48.3% equity and 29.0% fixed income). However, this marks a slight decrease of 0.2% compared to the previous year, as investors turned to alternatives such as private equity and other illiquids in search of returns.
Partly down to the recent dominance of US equities as performance drivers, North America experienced the largest growth in AUM with a 15.0% increase, followed closely by Europe (including the U.K.) with a 12.4% rise. Japan saw a slight decline, with AUM decreasing by 0.7%. As a result, North America now accounts for 60.8% of the total AUM in the top 500 managers, with USD 77.8 trillion at the end of 2023.
At the very top of the rankings, U.S. managers make up 14 of the top 20, and account for 80.3% of the assets of the top 20.
Turning to individual asset managers, the research shows that BlackRock remains the world’s largest asset manager, with its assets now above $10 trillion once more. Vanguard Group holds a strong second place at almost $8.6 trillion AUM and both remain significantly ahead of Fidelity Investments and State Street Global – ranked third and fourth respectively.
Notable risers in the full rankings in the last 5 years include Charles Schwab Investment, up 34 places to reach 25th place from 59th place. Geode Capital Management, also U.S. based, is up 31 places to reach 23rd place from 54, while Canada’s Brookfield Asset Management is up 29 places from 60th to 31st.
Jessica Gao, director at the Thinking Ahead Institute, comments: “Asset managers have experienced a year of consolidation and change. While there has been a return to strong market performance, the last year has also seen forces of change.
“Macro factors have played a key part in the story, with notable highs in interest rates during 2023 exerting varied pressure on different asset classes, geographies and investment styles. As this now gradually switches to a rate cutting environment, equity markets are beginning to return positive performance also driven by improving expectations of earnings growth. Uncertainties looking ahead are now focused on geopolitical events and several major elections.
“We have continued to see net flows into passive strategies as they continue to offer a compelling value proposition, particularly in terms of lower fees and simplicity. Yet growing market volatility and issues with concentration, which typically highlights the need for expertise to outperform benchmarks, may be a source of caution from some allocators to passive market trackers.
“Meanwhile, asset managers continue to face major pressure to evolve their own business models. Investment in technology remains essential not just to maintain a market edge, but also to meet evolving client requirements and expectation in reporting and customer service. Increased competition, fee compression, and the growing demand for more personalised, technology-driven investment solutions are challenging traditional structures. We have witnessed notable successes of independent asset managers versus many of the more affiliated insurer-linked vs bank-linked asset managers.”
The world’s largest money managers
Ranked by total AUM, in U.S. millions.
Rank Fund Market Total Assets (US$) 1. BlackRock U.S. $10,008,995 2. Vanguard Group U.S. $8,593,307 3. Fidelity Investments U.S. $4,581,980 4. State Street Global U.S. $4,127,817 5. J.P. Morgan Chase U.S. $3,422,000 6. Goldman Sachs Group U.S. $2,812,000 7. UBS Switzerland $2,620,000 8. Capital Group U.S. $2,532,813 9. Allianz Group Germany $2,454,495 10. Amundi France $2,250,226 11. BNY Investments U.S. $1,974,322 12. Invesco U.S. $1,585,344 13. Legal & General Group U.K. $1,475,442 14. Franklin Templeton U.S. $1,455,506 15. Prudential Financial U.S. $1,449,673 16. T. Rowe Price Group U.S. $1,444,500 17. Northern Trust U.S. $1,434,500 18. Morgan Stanley Inv. Mgmt U.S. $1,373,456 19. BNP Paribas France $1,364,099 20. Natixis Investment Managers France $1,288,581 Notes to editors:
Figures were the latest available as of Dec. 31, 2023About the Thinking Ahead Institute
The Thinking Ahead Institute was established in January 2015 and is a global not-for-profit investment research and innovation member group made up of engaged institutional asset owners and service providers committed to changing and improving the investment industry for the benefit of the end saver. It has over 55 members around the world and is an outgrowth of WTW Investments’ Thinking Ahead Group, which was set up in 2002.
About WTW Investments
WTW’s Investments is an investment advisory and asset management firm focused on creating financial value for institutional investors through its expertise in risk assessment, strategic asset allocation, fiduciary management and investment manager selection. It has over 900 colleagues worldwide, more than 1,000 investment clients globally, assets under advisory of over US$4.7 trillion and US$187 billion of assets under management.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
You can read the full report here.
One chart caught my attention, growth in manager AUM between 2018 and 2023:
And this one on how rankings shifted during that time:
Notable increases in Brookfield's assets which doesn't surprise me, but also Blackstone which also doesn't surprise me given they are both leaders in alternative assets.
Also worth noting that Royal Bank of Canada, Power Financial and Sun Life Financial were among the top 50.
The key shift in assets is really twofold: more in passive public equities where concentration risk remains elevated (Mag-7 dominate holdings) and more in private markets including private credit.
That's why you'll see firms like Apollo, Blackstone, Brookfield, KKR, Carlyle and others in alternatives grow their assets under management in the years ahead.
Anyways, there's also a discussion on net zero targets and the full list of asset managers is available at the end of the report here.
Below, Blackstone is the world’s largest alternative asset manager, with more than $1.1 trillion in assets under management. Blackstone President & COO Jonathan Gray says recognizing patterns and having a contrarian view are key to excess returns, and the reason why Blackstone has been able to grow so rapidly.
In this Goldman Sachs Talks, Gray sat down with John Waldron, President & COO of Goldman Sachs, to discuss positive signs in the real estate market, why company culture is important, and lessons from his over 30 years at Blackstone.
Also, Jon Gray recently shared his views on the current state of the global economy and where Blackstone sees promising investment opportunities. He also shared the firm’s commitment to Asia including South Korea, where Blackstone has been a dedicated investor over the years and built a meaningful presence. The chat will be moderated by Eugene Cook, Head of Korea for Blackstone Private Equity.
Lastly, Peter Orszag, Lazard CEO, joins CNBC’s ‘Money Movers’ to discuss Lazard earnings, inflation, the economy, and more.The full interview is available here for subscribers where he discussed private equity and pickup in M&A activity.
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