World's Largest Investment Managers: Assets Surge to $128 Trillion
Monday, Oct 21, 2024 12:11 pm ET
1min read The global investment management industry has witnessed a remarkable resurgence, with total assets under management (AUM) reaching $128 trillion at the end of 2023, according to new research from WTW's Thinking Ahead Institute. This significant growth, a 12.5% increase from the previous year, marks a strong recovery from the major correction experienced in 2022.
The dominance of US equities as performance drivers played a pivotal role in the growth of AUM in North America. The region experienced the largest increase in AUM, with a 15.0% rise, followed by Europe at 12.4%. As a result, North America now accounts for 60.8% of the total AUM in the top 500 managers. The renewed growth of private markets also contributed to the overall increase in AUM, as investors sought higher returns in alternative asset classes.
The continued evolution of active vs. passive investment strategies has significantly impacted AUM growth among the largest investment managers. For the first time, passive investment strategies now account for more than one third of AUM among the 500 largest firms. This shift, driven by lower fees and simplicity, has led to growing market volatility and concentration issues, which may necessitate expertise to outperform benchmarks.
The major correction in 2022, which saw AUM drop by $18 trillion, influenced the 12.5% annual growth in AUM in 2023. As macro factors, such as interest rates and geopolitical events, continued to play a key role in shaping market performance, asset managers adapted their strategies to navigate the changing landscape.
In conclusion, the world's largest investment managers have experienced a year of consolidation and change, with AUM surging to $128 trillion. The dominance of US equities, renewed growth of private markets, and the evolution of active vs. passive investment strategies have all contributed to this remarkable growth. As the industry continues to evolve, asset managers must remain adaptable and innovative to meet the challenges and opportunities that lie ahead.
The dominance of US equities as performance drivers played a pivotal role in the growth of AUM in North America. The region experienced the largest increase in AUM, with a 15.0% rise, followed by Europe at 12.4%. As a result, North America now accounts for 60.8% of the total AUM in the top 500 managers. The renewed growth of private markets also contributed to the overall increase in AUM, as investors sought higher returns in alternative asset classes.
The continued evolution of active vs. passive investment strategies has significantly impacted AUM growth among the largest investment managers. For the first time, passive investment strategies now account for more than one third of AUM among the 500 largest firms. This shift, driven by lower fees and simplicity, has led to growing market volatility and concentration issues, which may necessitate expertise to outperform benchmarks.
The major correction in 2022, which saw AUM drop by $18 trillion, influenced the 12.5% annual growth in AUM in 2023. As macro factors, such as interest rates and geopolitical events, continued to play a key role in shaping market performance, asset managers adapted their strategies to navigate the changing landscape.
In conclusion, the world's largest investment managers have experienced a year of consolidation and change, with AUM surging to $128 trillion. The dominance of US equities, renewed growth of private markets, and the evolution of active vs. passive investment strategies have all contributed to this remarkable growth. As the industry continues to evolve, asset managers must remain adaptable and innovative to meet the challenges and opportunities that lie ahead.
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