A dismal foreign equity market pummeled overseas strategies in the year ended March 31, dragging assets down 34% for firms surveyed in Pension & Investments' annual international and global manager rankings.
The 196 money managers that participated in the survey reported $5.5 trillion in combined international and global accounts managed for institutional clients as of March 31. That compared with a revised total of $8.3 trillion for 191 managers a year earlier.
(To view the full special report, including manager profiles, complete rankings and other data, please click here.)
This year's total did not include AIG Investments, which declined to respond to P&I's survey because of its ongoing reorganization. AIG had been ranked sixth last year with $273.9 billion. Deutsche Asset Management, which ranked 10th last year, also declined to respond. Last year, it reported $240.1 billion in worldwide institutional assets in international and global mandates.
Nonetheless, the results mark a significant falloff in international and global assets, which started experiencing slower growth last year after enjoying two successive years of impressive gains.
In P&I's survey, assets under management for the top 25 money managers of global accounts managed for worldwide institutional clients totaled $1.8 trillion, down 30.8% from last year; the top 25 money managers of international accounts totaled $2.4 trillion, a drop of 33.3%.
Assets under management for international and global accounts managed for U.S. institutional tax-exempt clients totaled $1.4 trillion this year, dropping 38.1% from a year earlier.
For the year ended March 31, the Morgan Stanley Capital International Europe Australasia Far East index tumbled 46.5% while the MSCI World index fell 42.6%.
“It was an extremely challenging time in the markets when liquidity was (at) a premium,” said Ron Dugan, managing director of equities at Russell Investments in Tacoma, Wash.
Mr. Dugan said many managers saw clients tapping global and international global equity accounts to gain liquidity when they could not realize it from fixed income and hedge funds.
“It was an ATM for plan sponsor clients and retail clients that needed access to cash,” he said.
Troy Saharic, western regional head for investment consulting for Mercer, said that until the market downturn of 2008, public equities on a global basis were doing well.
“You saw people diversifying their pools to non-U.S. and emerging markets,” Mr. Saharic. “Now people are looking at other ways to diversify instead of public equities.”
In this year's survey, Barclays Global Investors Inc. managed to hang onto the top spot, with $605.6 billion in international and global accounts under management for worldwide institutional clients. That represents a 26.9% drop from last year.
State Street Global Advisors remained in second place, with $432.4 billion, a 40.3% plunge.
“The vast majority of the drop is related to the market, particularly in 2008,” said Scott Powers, president and CEO of SSgA. “Market impacts around the world have been universally more correlated than (they have been) historically. We had pretty uniformly bad markets around the world.”
Mr. Powers said SSgA's exposure to emerging markets contributed to its asset drop.