Separate account wrap program assets rose to $319 billion at year-end 2001, up 6.8% from the end of 2000, according to a new Cerulli Associates study. Wrap account assets totaled just $74 billion as of year-end 1994, according to Cerulli data.
The increase was in sharp contrast to a 7.5% decline in net long-term mutual fund inflows for 2001. Flows to separate account wrap programs were a net $8.6 billion in the third quarter alone, compared with a net $5.6 billion for long-term mutual funds in the same quarter.
Cerulli analysts expect separate account wrap programs to grow between 15% and 20% per year reaching up to a total of $625 billion by the end of 2005. The top 10 money managers participating in wrap programs have a combined market share of just 35%, leaving the playing field wide open for smaller money management firms to get in on the action, they said.