Worldwide institutional and U.S. institutional tax-exempt assets of the 500 largest money managers rebounded into a growth mode in 2012, but that growth was uneven.
Worldwide institutional assets under management had the biggest bump, up 10.47% from year-end 2011 to $32.15 trillion. U.S. institutional tax-exempt assets managed by the largest 500 managers rose a more modest 6.76%, reaching $11.59 trillion at the end of 2012, according to Pensions & Investments' annual money manager survey.
The growth momentum went beyond institutional assets, with overall assets under management of the top 500 managers growing 9.7%, to $46.76 trillion as of Dec. 31.
A year earlier, by contrast, worldwide institutional assets of the 500 largest managers were flat and U.S. institutional tax-exempt AUM had dropped 5.3% after two years of growth.
Despite the positive news, U.S. institutional tax-exempt institutional assets of the 500 largest managers still have not fully recovered to the pre-financial crisis level of $12.38 trillion at year-end 2007.
Among individual money management firms in 2012, BlackRock Inc. and State Street Global Advisors maintained their top rankings, with $2.59 trillion and $1.67 trillion, respectively, in worldwide institutional assets under management.
BlackRock, however, saw only a 3.1% increase in worldwide institutional assets in 2012. Among the top 10 managers, only sixth-rated Fidelity Investments had a smaller increase, 1.7%. In contrast, Pacific Investment Management Co. LLC moved to third from fourth the prior year on the strength of a 28% increase in worldwide institutional assets, the best among the top 10 managers. The Newport Beach, Calif., firm had $1.43 trillion in worldwide institutional assets as of Dec. 31.
Douglas Hodge, managing director and chief operating officer, cited two main reasons for the firm's boost in worldwide institutional assets. “There has been this global tail wind of derisking and deleveraging that began post-crisis,” which has created flows worldwide “from every channel PIMCO serves,” he said. “We've been well positioned to do this. The other source is asset allocation. We've been one of the leaders in asset allocation solutions, and that includes gaining mandates from institutional investors.”