Further concentration among largest managers and ‘potentially massive’ industry disruption looms
ARLINGTON, Va., Oct. 29, 2018 (GLOBE NEWSWIRE) — Total assets under management (AuM) of the world’s largest 500 managers grew to $93.8 trillion in 2017, representing a rise of 15.6% on the previous year, according to the latest Global 500 research from leading global advisory, broking and solutions company Willis Towers Watson’s (WLTW) Thinking Ahead Institute. In addition, the concentration of assets managed by the 20 largest managers reached the highest level since inception (in 2000) and now account for over 43% of the top 500 managers’ total AuM.
The research shows North America-based managers represent the majority of assets (58.1%), though their share fell slightly in 2017, the first fall since 2008. European managers represent 31.8% of assets managed (the U.K. being 7.4%), Japan 4.8% and the rest of the world 5.2%. Assets in each region grew in 2017. While the majority of assets (77.6%) are managed actively, the share of passive assets has grown from 19.5% to 22.4% in the last five years. In 2017 passive assets grew 25%.
BlackRock remains the largest asset manager in the rankings, a position it has held since 2008; Vanguard and State Street complete the top three for the fourth successive year.
“Once again, total assets have increased; the rate of growth in 2017 is the biggest since 2009,” said Bob Collie, head of Research at the Thinking Ahead Institute. “The names at the top of the ranking are familiar ones. There’s greater concentration in the biggest names. On the surface, the numbers might appear to tell a story of steady growth and stability. But when you look at broader developments within and beyond the industry, there are signs the industry is facing significant change.”
In an indication of future areas of focus, more than four out of five (81%) managers surveyed reported an increase in client interest in sustainable investing, including voting, while nearly three-quarters (74%) increased resources deployed to deal with technology and big data. Nearly two-thirds of firms surveyed had increased the number of product offerings during 2017, while 60% reported an increase in the level of regulatory oversight according to the research.
“It’s not just a focus on technology. There is a confluence of global trends — including demographic, economic, environmental and social pressures — that are combining to create a period of potentially massive disruption for the industry. The implications go well beyond the investment process. These changes affect business models, people models, operating models and distribution models. They will be felt in every corner of the organization.”
“Firms will choose to respond to these challenges in different ways. Successfully responding to these new industry realities may prove to be as much a test of character and culture as it is a test of traditional business and investment skills,” added Collie.
The world’s largest money managers
Ranked by total assets under management, in USD millions, as of Dec. 31, 2017
|3||State Street Global||U.S.||$2,781,693|
|6||J.P. Morgan Chase||U.S.||$2,034,000|
|7||Bank of New York Mellon||U.S.||$1,892,941|
|11||Goldman Sachs Group||U.S.||$1,494,000|
|15||Legal & General Group||U.K.||$1,333,162|
|17||Northern Trust Asset Mgmt.||U.S.||$1,161,000|
|20||Natixis Global Asset Mgmt.||France||$997,849|
|Source: Pensions & Investments/Thinking Ahead Institute 500|
About the Thinking Ahead Institute
The Thinking Ahead Institute is a global not-for-profit member organization whose aim is to influence change in the investment world for the benefit of savers. The Institute’s members comprise asset owners, investment managers and other groups that are motivated to influence the industry for the good of savers worldwide. It has 45 members with combined responsibility for over US$12 trillion and is an outgrowth of Willis Towers Watson Investments’ Thinking Ahead Group.
About Willis Towers Watson
Willis Towers Watson (WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.