Assets of the 500 biggest managers of U.S. institutional tax-exempt money jumped 11.2% in 2010, just half a percentage point off the pace of the prior year's rebound from the global financial crisis, Pensions & Investments' latest annual money manager survey shows.
Despite a second year in a row of solid growth, the group's combined $11.42 trillion in assets under management remained $1 trillion short of the pre-crisis high reached at the end of 2007.
Even so, money management executives said a growing appetite for risk in 2010 made the year a good one for managers of institutional assets, powered by attractive gains for key market segments.
For the year, the broad Russell 3000 U.S. equity benchmark jumped 16.93%, the Morgan Stanley Capital International All Country World Investable Market, ex-U.S. index added 9.43% and the U.S. Barclays Capital Aggregate bond index rose 6.54%.
Among managers, BlackRock Inc. grabbed the top spot in the latest rankings with $929.4 billion in U.S. institutional tax-exempt assets, up 6% from the year before. BlackRock traded places with State Street Global Advisors, at $848.1 billion, down 4.4%.
Robert Fairbairn, senior managing director and head of BlackRock's global client group, said 2010 was the year BlackRock put a challenging integration “behind us.”
As the firm continued to meet the needs of clients putting greater emphasis on risk management, that focus found BlackRock enjoying an uptick in demand in areas such as liability-driven investments, multiasset class solutions, fiduciary outsourcing and both the passive and alternatives sides of “barbell” approaches to asset allocation, he said.
Executives at top 10 firms called the year a strong one, even if outflows from safe-haven segments and wind-downs of assets the government was left holding during the crisis depressed AUM gains for some of the biggest firms.
In fact, the $5.087 trillion in combined AUM for the 10 biggest managers was up only 5.6% from the year before, or roughly half the gain for the top 500 — even as a number of observers predicted growing client demand for partnerships with managers would increasingly favor bigger firms.