ASIA, October 24, 2023 – Total assets under management (AUM) at the world’s 500 largest asset managers amounted to USD 113.7 trillion at the end of 2022, according to a new research paper from the Thinking Ahead Institute. This represents a 13.7% drop on the previous year, which is the first significant fall in assets managed since the Global Financial Crisis of 2008.
There are some differences by region. Japanese managers within the world’s largest 500 fared much better than average with a 5.5% decrease in assets, while North American asset managers saw a 14.2% decrease and Europe (including the UK) experienced an above-average 16.8% decrease. Overall, managers in Asia Pacific (APAC) experienced a relatively resilient year, despite being affected by weaker currencies relative to the dollar with their AUM decreasing by only 4.9%.
The research also reveals the continued evolution of active vs. passive assets under management among the largest investment managers. Investment in passively managed funds has come to account for 34.7% of the total, as of 2022, up 4 percentage points from the previous year. Notably, among the world’s largest managers, this still leaves a considerable majority of 65.3% actively managed assets.
Among asset classes, the fall in equity and bond markets caused a gentle shift in weightings with alternative investments increasing to 7.1% of assets managed. The market falls caused the combined equity and fixed income allocation to decrease by 2.4 percentage points from a very stable 79 to 80% share over the last 10 years.
The falls in equities and bonds also impacted the degree of consolidation within the top 20 managers. It is very hard for extremely large managers to have an above average exposure to less liquid asset classes, and so the top 20 were disproportionately hit by the mainstream market falls. The top 20 firms’ share of the total assets decreased from 45.2% in 2021 to 44.2% in 2022. Their total AUM decreased year-on-year to USD 50.3 trillion.
Turning to individual asset managers, the research shows that BlackRock remains the world’s largest asset manager, despite seeing a drop in AUM from just over USD 10 trillion to just over USD 8 trillion in 2022. The Vanguard Group is still significantly ahead of Fidelity Investments and State Street Global – ranked third and fourth respectively – which each saw assets dip to below US$4 trillion.
Jessica Gao, director at the Thinking Ahead Institute, comments: “Throughout 2022, amidst significant turbulence, high inflation and interest rates, and geopolitical tension, investors have faced losses that effectively erased most of the gains achieved during the record-breaking 2021. As we have conducted this research, a common theme throughout our conversations with managers has been to expect a higher-for-longer regime in interest rates in which concerns about inflation and growth remain elevated, suggesting investment managers are not out of the woods yet.
“The need to consider sustainability issues and adapt to systemic risk means forward thinking and robust investment processes that are able to model and measure risks like never before. Looking ahead, this awareness of system-level risks could offer support to the investment world as it grapples with the generational challenge of climate change impacts and other sustainability issues.”
Jayne Bok, Head of Investments, Asia, at WTW adds: “Like their global peers, APAC’s asset managers are similarly feeling the pressure from the continued slowdown in growth. Sentiment over China’s slower than expected recovery has clouded investment opportunities in the region, with the unpredictability of geopolitics and a more protracted real estate crisis adding to market uncertainty. That said, China is still an important market and opportunities usually arise when expectations are at their lowest. The APAC region continues to offer valuable diversification and growth potential for investment managers, with significant innovation capabilities and ample room for policymakers to stimulate the economies.”
Ranked by total AUM, in U.S. millions.
| Rank | Fund | Market | Total Assets (US$) |
|---|---|---|---|
| 1 | BlackRock | U.S. | $8,594,488 |
| 2 | Vanguard Group | U.S. | $7,252,612 |
| 3 | Fidelity Investments | U.S. | $3,655,574 |
| 4 | State Street Global | U.S. | $3,481,473 |
| 5 | J.P. Morgan Chase | U.S. | $2,766,000 |
| 6 | Goldman Sachs Group | U.S. | $2,547,000 |
| 7 | Allianz Group | Germany | $2,285,496 |
| 8 | Capital Group | U.S. | $2,175,965 |
| 9 | Amundi | France | $2,031,753 |
| 10 | UBS | Switzerland | $1,845,000 |
| 11 | BNY Mellon | U.S. | $1,836,032 |
| 12 | Legal & General Group | U.K. | $1,444,393 |
| 13 | Invesco | U.S. | $1,409,204 |
| 14 | Franklin Templeton | U.S. | $1,387,686 |
| 15 | Prudential Financial | U.S. | $1,377,417 |
| 16 | T. Rowe Price Group | U.S. | $1,274,700 |
| 17 | BNP Paribas | France | $1,269,246 |
| 18 | Northern Trust | U.S. | $1,249,500 |
| 19 | Morgan Stanley Inv. Mgmt | U.S. | $1,234,226 |
| 20 | Natixis Investment Managers | France | $1,151,280 |
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.
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.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.
