Mike O'Brien, managing director and head of institutional business at BGI, London, said the firm has benefited from the fact that institutional investors in different countries and regions are now thinking along similar lines when it comes to asset management. "Indexation and low-risk active quant strategies have been very strong themes (during 2005) and are the bedrock of investment programs around the world," he said.
Other reasons for BGI's asset growth were strong retail inflows in exchange-traded funds and the firm's liability-driven investment strategies. Those strategies are gaining in popularity particularly in BGI's European business because of the move toward a mark-to-market system of global accounting, Mr. O'Brien said.
Much of BGI's asset gain in the past five years came from the firm's increased equity exposure and the broadened range of strategies, including enhanced index and higher-return active portfolios, Watson Wyatt's Ms. Judd said. In 2000, BGI was known primarily as a passive manager but since then has been able to diversify its product range, said Craig Baker, head of manager research.
Overall, passive assets among the top 500 grew in line with actively managed assets at 10%.
"Active and passive strategies are just as popular as each other. The reality is that clients have in place their passive core. More and more clients tend to have a passive core and higher risk/return managers to complement this," said Mr. Baker.