UBS Group kept the top spot as the world's largest money manager in 2001, a year in which the firm - and many other big managers - lost assets because of the decline in equity markets worldwide.
Zurich-based UBS' assets were down 3% to $1.5 trillion.
Allianz Group's acquisition of Dresdner Bank propelled it to second place. The Munich firm's assets rose 54% to slightly more than $1 trillion, according to the annual survey by Pensions & Investments and Watson Wyatt Worldwide.
With the sharp fall in the equity markets, firms with large fixed-income and money market assets showed stronger year-over-year results, according to Martin Wahlgren, investment consultant at Watson Wyatt, Reigate, England.
Speaking on Allianz's increase in total assets, Mr. Wahlgren noted much of the gain came not from the acquisition but from money flowing into its Pacific Investment Management Co. subsidiary, the largest fixed-income manager in the Unite States, with $280 billion in fixed-income assets under management.
Total merger and acquisition activity in 2001 slowed dramatically from 2000. Non-U.S. corporate merger activity fell to fewer than 40 deals, from 60 the year before
Total assets of the 500 firms surveyed stayed flat in 2001, with a decrease of less than 1%, to $35.2 trillion. In 2000, assets increased 5% to $35.3 trillion from the year before.
Allianz's move into second place displaced last year's second, third and fourth placeholders by one slot each.
Falling a notch
Fidelity Investments, Boston, fell a notch to third place with a nearly 3% decline in assets, to slightly more than $1 trillion. Credit Suisse Group, Zurich, and AXA Group, Paris, slipped a notch to fourth and fifth, respectively. Credit Suisse's assets fell 2%, to $850.8 billion, while AXA's assets fell 4%, to $806 billion.
Assets of the top 20 investment managers rose only 1% in 2001, to more than $13.4 trillion. "The story is there wasn't a large amount of action in 2001; there was a lot a market impact as the global equity markets were down about 16%," said Kaz Yasuda, a senior investment consultant with Watson Wyatt in the Reigate office.
Citigroup Inc., New York, which moved to 15th place from 18th, and Mellon Financial Group, Pittsburgh, which rose to 11th from 14th place, trailed Allianz for largest asset increases of the year.
Citigroup's assets under management rose 16%, to $502.3 billion. Mellon's assets grew 12%, to $592 billion.
Citigroup's growth was organic, with increases coming from its retail unit and mutual funds as well as its institutional division, according to Patrick McNelis, managing director and head of institutional advisory services for the Americas. "We've had a number of consultant upgrades and recommendations over the last 18 months," he added.
Mellon acquired Standish Ayer & Wood, which had $43 billion of assets and ranked 160th in last year's survey. Mellon's total assets were 3% higher at year-end 2001 than the combined total of the two firms from year-end 2000.
Mr. Wahlgren pointed out that some of Mellon's asset gain came from its Dreyfus Corp. mutual fund subsidiary, which has many money market funds that attracted a lot of capital.
New to top 20
The only new firm in the top 20 for 2001 was Prudential Financial, which came in 20th with $387.9 billion, a 4.5% increase. Prudential switched places with Nippon Life Insurance, which fell to 21st place, with a 15% decline in assets to $339.3 billion.
The growth of assets at the top 20 firms and at the 21st through 50th firms were both just more than 1%, while assets at the 51st through 250th firms fell less than 1%, and assets at the bottom 250 firms fell by 3%.
The concentration of assets for the 500 firms was the same in 2001 as it was in 2000. The top 20 firms held 38% of the total assets, the 20th through 50th firms managed 22% of total assets, the 50th through 250th firms had 35% of total assets and the bottom 250 firms managed just 5% of total assets.
Susan Douse, partner and senior investment consultant for Watson Wyatt, said the fact that asset growth of many large firms was either flat or up slightly "is significant, considering what happened with the equity markets."
She pointed to Capital Group, which held on to 12th place, with a 2% increase in assets to $573.8 billion, and Brandes Investment Management, which rose to 125th place from 141st place last year, with a 22% increase in assets to $61.9 billion, as two success stories.
Indexers had mixed results for the year. State Street Global Advisors, Boston, rose to sixth place from seventh with an 8% increase in assets, to $785.4 billion.
Part of the increase is due to SSgA's acquisition of Gartmore Investment Management's indexing business, which added about $10 billion to its assets.
Barclays Global Investors, London, fell to seventh place from fifth and dropped 4% in assets to $768.6 billion.
Vanguard Group, Valley Forge, Pa., rose to ninth place from 10th, with a 3% increase in assets, to $605.5 billion.
Outside the top 20 firms, Wachovia Corp., Winston-Salem, N.C., rose to 42nd place from 142nd place, with total assets of $226 billion, after its acquisition of First Union Corp., which ranked 74th last year. Wachovia's assets in 2001 were 28% higher than the combined total of the two firms from the year before.
SG Asset Management, Paris, rose to 41st place from 56th after its acquisition of TCW Group, which ranked 112th previously. The new firm's total assets of $228.5 billion were less than 1% lower than the combined total of year-end 2000 assets.
HSBC Holdings PLC, London, rose to 30th place from 77th with a 130% increase in total assets to $284 billion.
For 2001, HSBC included assets of its international private banking clients in its total.
In the fixed-income area, Goldman Sachs Group, New York, and BlackRock Inc., New York, stood out. Goldman rose to 26th place with an 18% increase in total assets, to $306 billion. BlackRock rose to 38th place, with a 17% increase in total assets to $238.5 billion.
According to Ms. Douse, both Goldman and BlackRock did well because of their large fixed-income and money market funds.
In the opposite direction, Stilwell Financial Inc., Denver, slid to 47th place from 34th place.
Stilwell, the parent company of the Janus mutual fund family, had its assets under management fall 25%, to $192.2 billion.
Ms. Douse said most of Janus' funds are in the growth and high-technology areas, which were hurt badly in 2001.