Asset managers still face challenges despite worldwide assets under management increasing in 2010 for the second straight year, according to a study from Boston Consulting Group.
Institutional investors like pension plans often will not provide significant inflows during an economic recovery because contributions to the plans are not as necessary, Brent Beardsley, BCG partner and co-author of the study, said in a telephone interview.
Adopting liability-driven investing strategies can also be a driver in fewer net inflows in institutions.
“If they've constructed the solution properly, there's no more need to make inflows or make contributions,” Mr. Beardsley said.
BCG's ninth annual study, "Building on Success: Global Asset Management 2011," cites the continuing recovery of equity markets for the increase in worldwide AUM to $56.4 trillion as of year-end 2010, an increase of 8% from the previous year and up 21% from year-end 2008.
Of the global regions represented in thhttp://edit.pionline.com/apps/pbcsedit.dll/red#e study, Latin America posted the greatest increase, with $1.3 trillion in assets under management as of year-end 2010, an 18% increase from the previous year.
The study also reports four trends in the post-crisis evolution of global asset management:
• Investor demands keep getting tougher, with investors more likely to scrutinize their asset managers.
• Product dynamics continue to shift, with faster growth in passive and alternative management over active management.
• The role of regulation is increasing.
• Different markets face different competitive challenges, with more mature markets such as North America, Europe, Australia and Japan growing at a more modest pace than developing markets such as Latin America.