Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Innovation Investing Conference
    • 2022 Defined Contribution East Conference
    • 2022 ESG Investing Conference
    • 2022 DC Investment Lineup Conference
    • 2022 Alternatives Investing Conference
Breadcrumb
  1. Home
  2. Print
June 24, 1996 01:00 AM

SPECIAL REPORT;INTERNATIONAL/GLOBAL MANAGERS;MANAGERS SEE ASSETS INCREASE 27.4%;TOP 50 FIRMS SURPASS $357 BILLION

Margaret Price
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The assets of the top 50 international and global money managers grew 27.4% in the year ended March 31, to $357.3 billion, according to Pensions & Investments' annual survey.

    A year earlier, the top 50 managed a total of $280.48 billion and in 1994, the top 50 managed $240.139 billion.

    The assets of the top 125 managers rose 26% to $400.084 billion in the year ended March 31, a significantly better gain in assets than last year's, in which the 125 largest firms posted a gain of 19.4% to $317.352 billion.

    Market gains contributed to the gain in assets. In the year ended March 31, the Morgan Stanley Capital International Europe Australasia Far East Index posted a 12.67% gain. But several other factors contributed to the gains in international and global portfolios:

    The surge in the U.S. stock market in 1995, which encouraged many plan sponsors to rebalance their portfolios, reallocating some of the return that exceeded their targets for domestic investments into foreign markets. While making that move, some sponsors even went further, lifting their foreign allocation by more than just the excess amount in their domestic portfolios. Some sponsors took these moves as a way to come closer to their target overseas allocations.

    Increased international targets at some funds, including those that raised or launched emerging markets allocations. Data from InterSec Research Corp., Stamford, Conn. underscore the latter point. As of Dec. 31, tax-exempt investors had $38 billion in emerging markets - including allocations to designated emerging market accounts and emerging markets holdings in broader international portfolios. Thus, at year end, emerging markets represented 13% of total international equity investments, compared with 7.9% at the end of 1992, InterSec reported.

    The rising interest in passive international investments. In 1995, indexed international equities mandates received 35% of total cash flow into international, compared with only 11% the previous year, said James Diack, InterSec director.

    Boston's State Street Global Advisors and San Francisco's BZW Barclays Global Investors -two firms known for indexing - were beneficiaries of assets moving to passive investing. In the year ended March 31, State Street Global gained a whopping $16.132 billion, to a total of $38.697 under management for international/global investments. Of the new cash inflow, more than 80% was for passive investment, said Peter Stonberg, chief investment officer.

    In addition, BZW Barclays gained $9.344 billion, to a total of $26.732 billion in assets under management for international/global investments. Of the new allocations, 90% went to pure indexing strategies, while the remainder was invested in actively managed quantitative strategies, also known as enhanced indexing, said Dave Nadig, managing director of marketing for BZW Barclays.

    The firm's growth in international assets resulted from new and additional allocations to what had been Wells Fargo Nikko Investment Advisors. Wells Fargo was acquired late last year by Barclays PLC of London. Before the merger, Barclays did not have assets under management from U.S. tax-exempt clients, said Mr. Nadig.

    Why did passive investing gain popularity last year? According to Reza Vishkai, director of international research at RogersCasey, Darien, Conn., one reason is that as funds increase their international allocations, "passive investing is one of the easiest and most cost effective ways to accomplish this move. In addition, many funds use the EAFE index as a proxy for their international equities exposure in asset allocation and asset liability studies."

    As a result, plan sponsors need international investing strategies whose performance roughly conforms to EAFE's. But according to Mr. Vishkai, that's not what they may be getting; in reality, many active international managers have deviated sharply from EAFE in their investment allocations. Partly for this reason, some plan sponsors are indexing more of their international assets, he said.

    Mr. Vishkai expects the appeal of passive international investing to continue growing. But for now, active international management remains dominant in size of assets under management. And as P&I's survey shows, some active international players posted sizable gains in the amount of money under management. For example, in the year ended March, Boston-based Grantham, Mayo, Van Otterloo & Co., posted a $4.798 billion rise in international assets under management, to a total of $13.374 billion; New York's Scudder, Stevens & Clark posted a $3.892 billion gain in international/global assets to a $12.75 billion total; and Los Angeles-based Capital Guardian Trust Co. saw its foreign-invested assets climb $3.781 billion to $23.279 billion.

    Rankings of the 10 largest international/global managers changed little in the year ended March 31. Rowe Price-Fleming International, Baltimore, and Bankers Trust Co., New York, moved onto that list, ranking ninth and 10th respectively. They bumped New York-based Morgan Stanley & Co., which slid to 11th place from sixth last year; and Boston's Putnam Investments, which dropped to 16th place from eighth the year before.

    Among other large managers, changes included: the ranking of London-based WorldInvest dropped to 40th from 22nd; Nomura Capital Management, New York, a unit of Nomura Investment Management Co. Ltd. of Tokyo, dropped to 25th from 18th, and New York's Fiduciary Trust Co. International fell to 23rd from 17th.

    Susan Leader, WorldInvest's director of U.S. marketing, said much of the drop in international/global assets under management at her firm came from the loss of two large fixed-income accounts, which she would not identify. Those losses occurred after the firm's global/international fixed-income performance suffered in the first half of 1994, followed by the "departure of some personnel" in the second half of 1994. She noted "our fixed-income performance has turned around since that time."

    According to the survey report, Putnam's decline in international/global assets appeared to be due to a drop in international/global fixed-income assets under management, and that international/global equity assets had risen. But the company did not respond to a telephone call for comment.

    Some managers also gained assets. With its reported $2.4 billion increase in international/global assets under management to $4.903 billion, the Bank of Ireland Asset Management (U.S.) Ltd., Greenwich, Conn., rose to 22nd place from 34th last year.

    Pacific Investment Management Co., Newport Beach, Calif., leapt to 19th place from 51st last year. But that jump largely reflected a tactical shift of domestic fixed-income portfolios that can be invested abroad at opportune times.

    According to John B. Brynjolfsson, PIMCO vice president, managers of this money shifted a sizable amount to European bond markets in last year's second quarter, and as of March 31, more than $3 billion remained there.

    Managers in this year's survey reported having a total of $234.051 billion under management from non-U.S. pension clients. The three largest sources of those assets were: the United Kingdom, supplying $120.166 billion of the total; the Netherlands, providing $35.634 billion; and Canada, $21.175 billion.

    There were 141 respondents to this year's survey, compared with 126 last year.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    OCIO, Anchor in Rough Seas
    Sponsored Content: OCIO, Anchor in Rough Seas

    Reader Poll

    May 9, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Crossroads: Politics, Inflation, & Bonds
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Q2 2022 Credit Outlook: Carry On
    Leverage does not equal risk
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    May 9, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Innovation Investing Conference
      • 2022 Defined Contribution East Conference
      • 2022 ESG Investing Conference
      • 2022 DC Investment Lineup Conference
      • 2022 Alternatives Investing Conference