Worldwide institutional assets of the 500 largest money managers increased 13.5% last year, while the firms' U.S. institutional tax-exempt assets grew roughly 8%, Pensions & Investments' annual money manager survey shows.
Institutional investors continued to plug more money into global and international strategies last year, said several consultants. But international markets and emerging markets handily outperformed domestic markets during the year, largely prompting worldwide assets to grow at a more significant clip than domestic assets.
The 500 largest managers surveyed by P&I had a combined $21.6 trillion in worldwide institutional assets as of Jan. 1, and $10.28 trillion in U.S. institutional tax-exempt assets, according to the survey.
Excluding subadvisory assets, the 500 managers' total U.S. institutional tax-exempt assets under management increased 7.8%, to a total of $9.4 trillion.
On a market-adjusted basis, the 500 largest managers saw their institutional tax-exempt assets under internal management increase about 2%.
Based on Pensions & Investments' data, the average asset allocation for the 500 largest manager' internally managed U.S. tax-exempt institutional assets was 52.4% equity, 29.7% fixed income, 10.8% cash, 3.2% real estate and 3.9% in "other" investments in 2005.
During the year, the Russell 3000 index return 6.12%, the Lehman Brothers Aggregate jumped 2.4%, the Citigroup T-Bill index was up 3.3%, NCREIF Property index increased 20.1%; and the Thomson Venture Economics/National Venture Capital Association Index returned 22.6%.
Many international equity markets outperformed the U.S. markets; the Morgan Stanley Capital International Europe Australasia Far East index, for example, rose 13.5% for the year ended Dec. 31.
Much of the increase in the U.S. experienced by the Top 500 was driven by the 100 largest money managers. As a group, these managers' U.S. institutional tax-exempt assets under management increased $729 billion, or 9%, to $8.7 trillion.
Meanwhile, the remaining institutional managers in the Top 500 only saw their assets increase by a total of $45 billion, or roughly 3%, from 2004.