Assets under management (AUM) by the world’s 500 largest asset managers reached $128 trillion at the end of 2023, according to the latest research from WTW’s affiliated Thinking Ahead Institute (TAI). While not reaching 2021 levels, the 12.5% growth rate already represents a significant recovery from the previous year’s adjustment, when assets under management fell by $18 trillion in 2022.
The study focuses on the evolution of active and passive management, revealing for the first time that more than two-thirds (33.7%) of the assets under management of the top 500 asset managers are in passive management strategies. However, nearly two-thirds continue to operate. Be actively managed.
In terms of asset class allocation, the growth of private markets has been significant. However, stocks and bonds remain the main asset classes, accounting for a total of 77.3% of assets under management (48.3% stocks and 29% bonds). This represents a decline of just 0.2% year-on-year, as investors continue to explore alternatives such as private equity and other illiquid assets to achieve higher returns.
“Partly due to the performance of US stocks as a driver of returns, the growth in assets under management was highest in North America with a 15% increase, followed closely by Europe (including the UK) with a 12.4% increase.However, in Japan “As a result, North America now accounts for 60.8% of the top 500 companies’ total assets under management, reaching $77.8 trillion by the end of 2023,” the report explains. are.
As a result, US asset managers dominate the rankings, occupying 14 out of the top 20 positions and accounting for 80.3% of the group’s assets. BlackRock remains the world’s largest private wealth manager, with total assets exceeding $10 trillion. Vanguard Group remains in second place with about $8.6 trillion, well ahead of Fidelity Investments and State Street Global, which are in third and fourth place, respectively. Among the managers with the most notable gains over the past five years were Charles Schwab Investments, which rose 34 places to No. 25, and Geode Capital Management, which rose 31 places to No. 23. Canada’s Brookfield Asset Management also rose 29 places to 31st place.
“Wealth managers have experienced a year of consolidation and change. While market performance has returned to strength, there have also been significant transformative drivers,” said Jessica Gao, director of the Thinking Ahead Institute. Masu.
The report’s findings show that macroeconomic factors play a key role, with high interest rates in 2023 exerting varying pressures across asset classes, regions, and investment styles. The study explains that as interest rates begin to move into a lower phase, equity markets are once again delivering positive returns, driven by growth expectations. Future uncertainties center on geopolitical events and some major national elections.
Raul Mateos, APG Leader for Continental Europe, notes that asset managers face significant pressure to evolve their investment models. “Technology is essential not only to remain competitive, but also to meet customer needs and expectations and accommodate growing investments.” Demand for more customized investment solutions. These demands challenge traditional industry structures. In this context, we have seen independent asset managers achieve remarkable success compared to many asset managers tied to insurance companies and banks. ”
Regarding specific regions, Mateos noted that AUM has increased globally over the past decade. However, Spain’s market share has declined over this period, dropping from 1.5% in 2013 to 0.6% in 2023. A list of 10 Spanish managers including companies such as CaixaBank, BBVA and Mapfre. Furthermore, assets managed based on ESG criteria increased by 15.5% in 2023, reaching 29.6% of ESG investments in the portfolio, the highest level in the past three years. This trend shows that ESG criteria are increasingly being incorporated into asset selection, indicating an increased focus on the impact our investments have on the world. ” he concludes.
