Assets managed by the world’s largest 500 fund managers sank to below 2006 levels by the end of last year, led by declines among the top 20 houses, finds a survey due to be released today.
Meanwhile, passive assets managed by the largest players have grown by more than 12% annually since 2001, underlining how asset owners have become less tolerant of paying active management fees for simple market exposure, says consultancy Towers Watson.
AsianInvestor is due to publish its 2012 annual rankings of the largest fund management companies by Asia-Pacific sourced assets in our forthcoming December issue. Mitsubishi UFJ Trust & Banking held top spot last year with $370 billion under management. It was followed by BlackRock with $363 billion and Macquarie Funds Group with $316 billion.
According to the global Pensions & Investments/Towers Watson World 500 survey, the assets of this elite band fell 3% across 2011 to $63 trillion amid volatile markets, having risen in the two previous years. The figure is below what it was at the end of 2006, when this group had $64 trillion.
The segment that lost the most last year was the top 20, with an asset decline of about 7%. Some 11 of the top 20 group were US-based, eight European and one Japanese (Nippon Life).
Interestingly, only Japanese managers increased total assets last year, up 6.4% to $5.3 trillion. That compares with a 7% decrease among European managers to $21.3 trillion and a 1.1% fall among North American managers to $33.1 trillion.
In fact, Japanese houses made up five of the 10 fastest-growing managers by assets from 2006 to 2011, led by Nippon Life (2nd place) and followed by Meiji Yasuda Life (5th), Zenkyoren (6th), Mitsubishi UFJ Financial (7th) and Shinkin Central Bank (8th).
HSBC Holdings snuck into 10th place on this list, and is now the 13th largest asset manager globally with $847 billion, the survey reports.
The top three houses retained their places, led by US firm BlackRock with $3.5 trillion and followed by Germany’s Allianz Group with $2.1 trillion and State Street Global with $1.86 trillion.
The largest Asia ex-Japan house was Samsung Group of South Korea, in 54th place with $308 billion. Other than that the only other two representatives were Australian players Macquarie (66th) and Commonwealth Bank Group (100th).
According to the research, asset managers from developing countries have more than doubled their share of total assets to around 5% over the past 10 years.
Since 2001 passive assets managed by the largest managers have grown by over 12% annually compared with 5% annually for the top 500 managers as a whole. Across 2011, passive assets managed by the largest houses fell by over 1% – the smallest fall since the research began.
“Institutional investors are increasingly looking for the most efficient way to invest their assets, which has led to more passive investment and low-cost, systematic approaches,” notes Mark Brugner, head of manager research for Asia at Towers Watson Investment.
“Asset owners are quite rightly becoming far less tolerant of paying active management fees for simply getting market exposure and are looking to obtain the latter as cheaply and efficiently as they can.”