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BCG: Money managers’ global AUM flat-lines in 2011

Brent Beardsley
Brent Beardsley

Traditional money managers failed to attract new business in 2011, with total global assets under management stalling at $58.3 trillion for the year, according to a study from Boston Consulting Group.

The global money management industry had $58.2 trillion in 2010 and $58.8 trillion in 2007, showing the industry has not fully recovered from the 2008-2009 financial crisis, according to BCG's 10th annual study, “Capturing Growth in Adverse Times: Global Asset Management 2012.”

Net inflows in 2011 increased only 0.5%.

“To look what happened between '03 and '07 in the growth and appreciation, it was 3% to 6% just from new money coming into the market and since '08 that's essentially flat,” said Brent Beardsley, partner and managing director at Boston Consulting Group, in a telephone interview.

“It's a share-stealing game, which is essentially hard to do.”

Assets for money managers that invest in developed markets continued to show weakness, with European AUM falling to $17.4 trillion in 2011, down from $17.5 trillion in 2010, while Latin America and Asia (excluding Japan and Australia) increased AUM 12% and 5%, respectively.

Since 2007, AUM in developed markets has fallen 1% per year since 2007 while emerging markets have had a compound annual growth rate of 7%.

“I think the danger for most traditional asset managers is: What does their distribution footprint look like?” Mr. Beardsley said. “If they're not involved in the emerging markets, they're unable to participate in that growth.”

More emerging markets-based money managers, particularly in Brazil, are also growing in sophistication, according to Mr. Beardsley. “They're thinking about becoming major players,” he said.

Also, actively managed core assets are declining as a percentage of total AUM, with 49% of overall assets in 2011, compared to 54% in 2008 and 63% in 2003. Active core includes active domestic large-cap equity, active government fixed income, money market and traditional balanced funds.

Active specialties (all other equity and fixed-income strategies) increased to 24% of total AUM in 2011, up from 22% in 2008 and 21% in 2003, while alternatives were at 13% in 2011 and in 2008, up from 8% in 2003, and passive/ETFs rose to 12% in 2011 from 9% in 2008 and 7% in 2003.

See the full BCG report: "Capturing Growth in Adverse Times: Global Asset Management 2012"