Assets under management (AuM) at the world’s 500 largest asset managers have reached a new record of US$119.5 trillion, according to new research from the Thinking Ahead Institute.
The research, conducted in collaboration with Pensions & Investments, a US investment newspaper, confirms growing concentration among the top 20 managers whose market share increased during the period to 44 per cent of total assets.
As of the end of 2020, this represents an increase of 14.5 per cent on the previous year when total AuM was previously $104.4 trillion.
Investment manager Blackrock has retained its position as the largest asset manager in the ranking, followed by Pennsylvanian firm Vanguard which has held second place position for the seventh consecutive year.
Of the top 20, 14 are US managers, accounting for 78.6 per cent of the top 20 AUM.
Passive investments represent 26 per cent, an increase of 16.2 per cent compared to a 15.4 per cent growth in actively managed AuM.
According to the research, passively-managed assets under management among the largest firms grew to a total of $8.3 trillion in 2020, up from $4.8 trillion in 2016.
Client interest in sustainable investing increased across 91 per cent of the firms surveyed, while
78 per cent of managers increased resources deployed to technology and big data, with a further 66 per cent increasing resources deployed to cyber security.
A majority of managers (59 per cent) experienced an increase in the level of regulatory oversight.
Of the top 500 managers, 221 names which featured on the list a decade ago in 2011 are now absent, demonstrating a quickening pace of competition, consolidation and rebranding, says the institute.
Roger Urwin, co-founder of the Thinking Ahead Institute, comments: “We have witnessed unprecedented change within the investment industry – accelerated dramatically by the pandemic. In particular, sustainability is no longer just a luxury for some firms. Instead, during the pandemic, asset managers from all corners of the world have become even more aware of the interconnectedness of the financial system with society and the environment.”
He adds: “Asset managers have always had the ambition to develop and innovate. We have seen this particularly with ESG mandates, which increased by 40 per cent in 2020. The biggest contributor to this was the growth in ESG exchange-traded funds.”
