Nearly $1 trillion is managed for institutional investors worldwide in investment outsourcing, an industry that barely existed five years ago.
In aggregate, $955 billion was managed on a partial or fully discretionary basis as of March 31, Pensions & Investments' second survey of investment outsourcers with at least $1 billion under management shows. That's up 59% from two years ago, the first time P&I conducted the survey.
The 10 largest investment outsourcers in P&I's universe controlled 62% or $593 billion of total reported outsourced assets under management, while the 25 largest managers held 87% or $831 billion.
P&I's survey data show that fully discretionary outsourced assets among the $1 billion-plus managers totaled $437 billion — about 46% of total outsourced assets — as of March 31.
Russell Investments retained its first-place ranking with $108.5 billion in investment outsourcing assets, 22% of which was managed with full discretion. Russell's assets rose 43% as of March 31, compared with the same date two years ago.
The remainder of the top five outsourcers as of March 31 were:
- Cambridge Associates, which held onto second place with assets of $87.5 billion, up 20% from the previous survey, with 8% of assets managed with full discretion;
- Mercer Investments, moving to third position from fourth, with assets of $73.9 billion, up 44.9% from the prior survey, with 100% of assets managed with full discretion;
- SEI Investments, which was nudged to fourth place from third, with assets of $67.1 billion, up 22.7% from the last survey, with 37% of assets managed with full discretion; and
- Towers Watson Investment Services, which remained in fifth place with assets of $59.4 billion, up 18.9% from March 31, 2011. The firm did not provide the breakdown between full and partial discretionary outsourcing assets.
The full special report on investment outsourcing will appear in P&I's July 8 issue.
