Asia’s leading fund managers grew their regional assets under management (AUM) by 25% last year, as regional institutional investors continued to outsource assets and more retail investors put money to work, according to AsianInvestor's latest AI100 survey.

The Asia-Pacific-located AUM of players from all geographies rose on average, but the rising tide favoured Asia-based fund managers the most. The combined AUM of Asia-headquartered firms rose by 31%. Japanese firms were only a short amount behind, with a 29.7% improvement.

Passively managed fund managers did well in the survey, with many climbing the rankings as more end-investors concluded that active managers were not worth the fees they charged, helping to spur a number of high-profile mergers between active managers. 

Overall, global firms in the AI100 saw their absolute percentage of AUM in Asia Pacific continue to decline, even as the overall pie grew. Still, even their combined AUM rose by 18.2% year-on-year, a good result given their Asia Pacific-sourced assets fell by 3.14% in the 2016 survey.

The largest managers of Asian assets remain global and Japanese firms. They accounted for nine of the top-10 firms by AUM and six of the top 20 firms by growth of assets.

A few dynamics lie behind the generally positive trends including the ongoing desire of families to invest in life insurance and, increasingly, pensions. Retail investors are also putting more money to work in mutual funds, particularly in China.

Passive appeal

A major theme permeating the global asset management market is the tussle between active and passive fund managers.

In recent years retail and institutional investors have begun to wonder whether the performance active funds deliver is worth the fees they charge. More end-investors are deciding they are not; all-told, investors globally shifted an estimated $500 billion in AUM from active managers to passive managers.

Key beneficiaries of the resulting shift of assets towards passively operated funds include Vanguard, BlackRock, and SSGA, the three largest managers of index funds and exchange-traded funds. This is reflected in this year’s survey.

BlackRock, the world’s largest overall fund manager with $4.5 trillion of AUM as of September 2016, saw its regional assets rise from an already weighty $391.9 billion in September 2015 to $440 billion as of September last year. State Street Global Advisors (SSGA), the third-largest passive manager with $2.2 trillion in total, expanded its regional assets by over 5% to hit $310 billion, putting it in sixth place overall.

Vanguard, the second-largest fund manager in the world and inventor of passive index funds, grew its regional assets by 24.77% to $136 billion. That put it in 18th place overall, but given its pace of expansion it’s likely to keep on rising up the rankings. It took in over $200 billion in net new assets across the world during 2016.

The pressure on active managers is less pronounced in Asia Pacific, which continues to add net capital into the global fund management industry, but globally fund management firms have been under pressure. Some have embarked upon mergers as they try to gain economies of scale, or broaden out product arrays in the hope of raising their appeal.

A key example is Baring Asset Management. The fund manager stands as the fastest-growing in the Asia-Pacific region, having seen its AUM increase by a whopping 355% from $18.1 billion in 2015 to $82.4 billion last year. Of course, such growth is impossible organically. Instead, it took place because of a merger of various companies at the behest of MassMutual, the US fund management company.

Consolidation pressures continue

The largest asset manager merger during 2016 was the $3.4 billion acquisition of American Capital by Ares Capital. However, neither company has a major Asia presence, and so doesn’t feature on our list.

Another major fund manager merger during 2016 was the $2.6 billion merger of Henderson Group with Janus Capital Group. Janus saw its assets leap by 30.77% to $35.7 billion by September 2016, putting it in 68th place on our list. More recently, struggling emerging markets-focused Aberdeen Asset Management announced a merger with Standard Life, enmeshing $809 billion of AUM.

Unless the pickup of the US economy greatly benefits active fund managers this year, they may not be the only fund houses that end up entering hasty marriages. The rapid improvement in US equity markets in particular will help all funds, while the positive result of France's presidential election, in which Emmanuel Macron beat nationalist Marine Le Pen to the presidency, offers scope for European equities to continue rallying too.

But these rises, when combined with increased geopolitical volatility and China's need to deal with its mounting credit bubble, could also raise the prospects of some sharp corrections in the months ahead.

That could give some active managers an opportunity to demonstrate their value versus index-tracking rivals. But it could also underline the lack of value offered by others, if they fail to materially outperform passive investors and exchange-traded funds.     

For more detailed breakdowns of the latest AI100 survey results by quartile, please look at these stories. And please look below for the list in full. 

The AI100
2016 Company name Data source AP 2016 AUM ($bn) AP2015 AUM ($bn) % change Global 2016 Global 2015 Date
1 Asset Management One Japan- based 497.0 136.0 265.44% 497.0 136.0 Sep-16
2 Sumitomo Mitsui Trust Bank Japan-based 473.0 423.5 11.69% 482.0 430.9 Sep-16
3 BlackRock Global firm 440.0 391.9 12.27% 5,117.0 4,506.0 Sep-16
4 Nomura Asset Management Global firm 373.0 325.7 14.52% 395.8 354.1 Sep-16
5 Mitsubishi UFJ Trust & Banking Japan-based 349.0 352.0 -0.85% 349.0 352.0 Sep-16
6 State Street Global Advisors Global firm 310.0 294.0 5.44% 2,446.0 2,203.0 Sep-16
7 Prudential Financial (US) Global firm 207.6 165.3 25.64% 681.0 575.0 Sep-16
8 Pimco Global firm 180.2 149.2 20.78% 1,550.0 1,470.0 Sep-16
9 Nikko Asset Management Japan-based 178.5 144.9 23.16% 189.0 156.2 Sep-16
10 Samsung Investments Asia-based 169.0 112.5 50.22% 168.0 112.5 Dec-15
11 China Asset Management Asia-based 161.5 110.1 46.68% 161.5 110.1 Sep-16
12 Tianhong Asset Management Asia-based 156.7 112.7 39.03% 156.7 112.7 Sep-16
13 UBS Global Asset Management Global firm 156.2 153.5 1.76% 692.0 671.0 Sep-16
14 Sumitomo Mitsui Asset Management Japan-based 153.1 145.3 5.36% 154.6 146.7 Sep-16
15 Amundi Global firm 151.7 110.4 37.41% 1,176.4 1,066.5 Sep-16
16 JP Morgan Asset Management Global firm 150.8* 127.6 18.24% 1,7770.0 1,700.0 Sep-16
17 CCB Principal Asset Management Asia-based 137.0 48.1 184.84% 137.0 48.1 Sep-16
18 Vanguard Global firm 136.0 109.0 24.77% 3,800.0 3,200.0 Sep-16
19 Eastspring Investments Asia-based 129.7 108.0 19.21% 149.8 124.9 Sep-16
20 Schroder Investment Management Global firm 129.6* 109.6 18.24% 487.1 446.5 Sep-16
21 ICBC Credit Suisse Asset Management Asia-based 124.9 91.1 37.06% 124.9 91.1 Sep-16
22 AMP Capital Investors Australia-based 120.0 107.8 11.40% 124.6 110.9 Sep-16
23 First State Investments Global firm 118.8* 100.4 18.24% 155.7 137.6 Sep-16
24 Daiwa Asset Management Japan-based 118.6 131.2 -9.60% 118.6 131.2 Mar-16
25 Mitsubishi UFJ Kokusaki Asset Management Japan-based 118.6 101.0 17.39% 118.6 101.0 Sep-16
26 HSBC Global Asset Management Global firm 114.5* 96.9 18.24% 416.0 421.0 Sep-16
27 Goldman Sachs Asset Management Global firm 107.3 91.7 17.01% 1,350.0 1190.0 Sep-16
28 Legg Mason Global Asset Management Global firm 105.8 80.4 31.59% 732.9 672.1 Sep-16
29 E Fund Asia-based 101.0 85.8 17.71% 101.0 85.8 Sep-16
30 Wellington Management Global firm 97.3 87.8 10.82% 998.3 898.4 Sep-16
31 Macquarie Asset Management Global firm 95.3 82.4 15.67% 376.6 352.7 Sep-16
32 Mirae Asset Global Management Asia-based 94.5 68.3 38.38% 100.5 73.0 Sep-16
33 AllianceBernstein Global firm 93.4* 79.0 18.24% 490.0 463.0 Sep-16
34 Harvest Fund Management Asia-based 93.3* 86.8 7.45% 96.0 89.4 Jun-16
35 Deutsche Asset Management Global firm 93.2* 78.8 18.24% 803.6 810.5 Sep-16
36 Manulife Asset Management Global firm 93.0 71.3 30.43% 342.8 294.0 Sep-16
37 Bank of China Investment Management Asia-based 90.5 78.6 15.11% 90.5 78.6 Sep-16
38 BNY Mellon Asset Management Global firm 84.6 89.7 -5.69% 1,720.0 1,600.0 Sep-16
39 Invesco Global firm 84.5 56.3 50.09% 820.2 755.8 Sep-16
40 China Southern Asset Management Asia-based 84.2 63.3 33.03% 84.2 63.3 Sep-16
41 Franklin Templeton Global firm 83.6 78.8 6.15% 733.3 770.9 Sep-16
42 Hanwha Asset Management Asia-based 82.5 56.4 46.29% 82.5 56.4 Sep-16
43 Baring Asset Management Global firm 82.4 18.1 355.19% 284.0 35.6 Sep-16
44 Bosera Asset Management Asia-Based 80.5 46.1 74.46% 80.5 46.2 Sep-16
45 GF Fund Management Asia-based 74.7 53.0 40.91% 74.7 53.0 Sep-16
46 BNP Paribas Investment Partners Global firm 74.0 55.9 32.23% 626.1 568.2 Sep-16
47 Axa Investment Managers Global firm 67.1 47.4 41.73% 786.0 747.0 Sep-16
48 Allianz Global Investors Global firm 61.7* 52.2 18.24% 541.0 477.0 Jun-16
49 China Universal Asset Management Asia-based 61.6 54.3 13.32% 61.6 54.3 Sep-16
50 Tokio Marine Asset Management Japan-based 57.4 46.8 22.65% 58.6 47.5 Sep-16
51 Credit Suisse Global firm 51.4* 43.5 18.24% 314.6 421.4 Mar-16
52 MFS Investment Management Global firm 51.3 45.2 13.42% 440.8 402.9 Sep-16
53 KB Asset Management Asia-based 49.9 39.1 27.42% 49.9 39.1 Sep-16
54 Reliance Nippon Life AM Asia-based 48.2 38.8 24.14% 48.2 15.5 Sep-16
55 Natixis Global Asset Management Global firm 46.8 40.4 15.84% 897.0 865.9 Sep-16
56 Daiwa SB Investments Japan-based 46.5 41.3 12.54% 51.5 46.7 Sep-16
57 Yinhua Fund Management Asia-based 46.5 42.0 10.67% 46.5 42.0 Sep-16
58 Morgan Stanley Investment Management Global firm 45.6 41.2 10.75% 417.1 403.6 Sep-16
59 IFM Investors Australia-based 44.5 35.8 24.46% 55.5 44.1 Sep-16
60 PineBridge Global firm 43.8 39.4 11.17% 82.6 77.6 Sep-16
61 Truvalue Asset Management Asia-based 43.3 - - 43.3 - Sep-16
62 China Merchants Fund Management Asia-based 42.6 41.6 2.38% 42.6 41.6 Sep-16
63 Russell Investment Group Global firm 42.5* 35.9 18.24% 257.9 237.3 Sep-16
64 Principal Global Investors Global firm 39.5 35.4 11.38% 418.0 341.0 Sep-16
65 Nissay Asset Management Japan-based 38.2 38.7 -1.23% 38.2 38.7 Sep-16
66 SCB Asset Management Asia-based 37.9 29.5 28.47% 37.9 29.5 Sep-16
67 Penghua Fund Management Asia-based 36.1 32.7 10.48% 36.1 32.7 Sep-16
68 Janus Capital Global firm 35.7 27.3 30.77% 195.1 181.5 Sep-16
69 Kasikorn Asset Management Asia-Based 34.8 31.0 12.26% 34.8 31.0 Sep-16
70 BT Investment Management Australia-based 34.5 14.8 31.69% 43.7 35.2 Sep-16
71 Northern Trust Global Inv Global firm 34.4 35.6 -3.37% 945.8 886.8 Sep-16
72 Fidelity Worldwide Investments Global firm 33.3* 28.2 18.24% 289.6 258.0 Sep-16
73 Korea Investment Management Asia-based 32.0 30.0 6.60% 32.0 30.0 Sep-16
74 HDFC Mutual Fund Asia-based 31.8 26.1 21.62% 31.8 26.1 Sep-16
75 Kiwoom Asset Management Asia-based 31.6 21.4 47.73% 31.6 21.4 Sep-16
76 Dimensional Fund Advisors Global firm 29.5* 25 18.24% 424.5 418.0 Dec-16
77 Dacheng Fund Management Asia-based 25.5* 19.4 31.16% 25.5 19.4 Estimate
78 Birla Sun Life Mutual Fund Asia-based 25.4 18.7 35.94% 25.4 18.7 Sep-16
79 AQR Capital Global firm 25.1 20.7 21.23% 172.4 135.3 Sep-16
80 SBI Mutual Fund Asia-based 24.8 17.8 39.51% 24.8 17.8 Sep-16
81 Aberdeen Asset Management Global firm 24.6 27.1 -9.23% 405.4 429.7 Sep-16
82 Lion Global Advisors Asia-based 24.0* 27.2 -12.01% 31.2 35.4 Sep-16
83 HuaAn Fund Management Asia-based 23.8 12.1 96.78% 23.8 12.1 Dec-15
84 Perpetual Asset Management Australia-based 23.5 19.9 18.02% 23.5 19.9 Sep-16
85 HFT Investment Management Asia-based 23.2 15.4 50.48% 23.2 15.4 Mar-16
86 Fortune SG Fund Management Asia-based 23.0 41.8 -44.98% 23.0 41.8 Sep-16
87 Lazard Asset Management Global Firm 22.6 19.5 16.32% 186.5 164.8 Sep-16
88 T. Rowe Price Asset Management Global firm 21.6* 18.3 18.24% 812.9 725.5 Sep-16
89 Fullgoal Fund Management Asia-based 21.5 14.5 48.34% 21.5 14.5 Sep-16
90 Krung Thai Asset Management Asia-based 21.2 17.2 23.02% 21.2 17.2 Sep-16
91 Guotai Asset Management Asia-based 21.1* 16.1 31.16% 21.1 16.1 Estimate
92 Aegon-Industrial Fund Management Asia-based 21.0 27.0 -22.30% 21.0 27.0 Sep-16
93 Tong Yang Asset Management Asia-based 21.0* 16.0 33.05% 21.0 16.0 Estimate
94 UOB Asset Management Asia-Based 20.9 18.9 10.58% 20.9 18.9 Oct-16
95 UTI Mutual Fund Asia-based 19.5 14.8 31.69% 43.7 35.2 Sep-16
96 China International Fund Management Asia-based 18.7 25 8.85% 18.7 17.2 Sep-16
97 Pictet Asset Management Global firm 18.2* 15.4 18.24% 168.0 149.6 Sep-16
98 Columbia Threadneedle Investments Global firm 18.2* 15.4 18.24% 468.0 471.0 Sep-16
99 Platinum Asset Management Australia-based 17.9 17.8 0.85% 17.9 20.0 Sep-16
100 Cohen & Steers Global firm 17.7 14.1 25.53% 60.5 49.7 Sep-16

*Estimate based on the industry average as company declined to break out its Asia-Pacific AUM to AsianInvestor