China’s fund managers might be expanding fast, but when it comes to the top-quartile players by asset size in the region Japan continues to boast the most players.

The world’s third largest economy accounted for eight of the top 25 fund houses in Asia Pacific by assets under management (AUM), including four of the top five. Despite two decades of slow or non-existent growth, the country’s asset managers remain major players. And the shake-up sparked by Prime Minister Shinzo Abe’s monetary easing and quantitative easing has provided both local and foreign fund houses an opportunities to tap client assets and boost returns.

At the top of this year’s ranking is Asset Management One, a company created from the merger of Diam, Shinko Asset Management and Mizuho Financial Group's fund management division. The resulting behemoth had $497 billion in AUM, beating arch-rival Sumitomo Mitsui Trust Bank into second place, despite the latter posting AUM growth of 11.7% last year.

Nikko Asset Management recorded the biggest non-merger-driven growth among its domestic peers, with its AUM swelling 23.2% to $178.5 billion. The fund house was named Japan asset manager of the year in our latest Asset Management Awards,

in part because it won new mandates from local institutions for international strategies, as well as benefiting from the Bank of Japan’s foray into the domestic exchange-traded fund market. Nikko AM has a sizeable ETF business, and it also sources a substantial amount of client assets from businesses outside Japan, including in Australia and Singapore.

However, some Japanese managers struggled amid the shift of local institutions into international markets. Daiwa Asset Management saw a 9.6% drop in AUM to $118.6 billion, leaving it in 24th place, while Mitsubishi UFJ Trust & Banking saw its assets slip 0.85% to $349 billion.

US heavyweights

While Japan’s fund houses comprise the largest number in our study’s top quartile, US firms also accounted themselves well, with six firms ending up in our top 25 players.

The world's biggest asset manager, BlackRock, ranked highest, with $440 billion in AUM, a 12.3% rise from last year that put it in fourth place. Still, that accounted for less than a tenth of its $5.1 trillion globally, and the firm clearly aims to increase that proportion. In March it relocated the role of global head of emerging markets to Hong Kong. Andrew Swan is now head of Asian and global emerging market equities, following the departure of Luiz Soares, who previously headed global emerging market equities and was based in New York.

Rival State Street Global Advisors ranked sixth, having seen its AUM grow by 5.4% to $310 billion, and it is keen to boost this through moves such as the tie-up it signed in January with Chinese manger E Fund.

Prudential Financial was in seventh with $207.6 billion, recording a very healthy 25.6% increase on the year before. This also means that almost a third of its global assets are in Asia Pacific, a far higher proportion than for most international asset managers.

Eighth-placed Pimco enjoyed similarly decent growth, with its regional AUM rising 20.8% to $180.2 billion, seemingly bouncing back after a torrid couple of years following the high-profile departure of founder and CIO Bill Gross in September 2014. 

Meanwhile, JP Morgan Asset Management in 16th spot saw its Asia-Pacific assets grow by 18.2% to $150.8 billion.

China managers rising

Chinese firms are having a growing impact on our ranking. While none cracked the top 10 this year, China Asset Management leapt to 11th spot after seeing its AUM grow by 46.7% to $161.5 billion. Top 10 status beckons.

Tianhong Asset Management also enjoyed robust AUM growth from $110 billion to $161.5 billion. The company’s ownership by tech giant Alibaba and its management of China’s most famous money market fund, Yu’e Bao, has helped ensure its appeal with local investors. It looks like another likely top 10 entrant next year.

The most impressive company in terms of organic growth was CCB Principal Asset Management, nearly trebling its AUM to $137.1 billion. Helping drive this were the licence it won to run enterprise annuity money in January 2016 and the launch of a range of funds to target pension assets late in the year.

 

The AI100, fund houses 1-25
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

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

The full feature, including the entire AI 100 list in its entirety, appeared in the February/March issue of AsianInvestor magazine.