U.S. institutional tax-exempt assets under management by the largest 500 managers reached $13.22 trillion at year-end 2013. That 13.9% gain finally put the assets above the pre-financial crisis peak of $12.42 trillion at year-end 2007.
Total global assets of the largest 500 reached $52.3 trillion at year-end 2013, a 12% rise from the year earlier, according to data from the latest Pensions & Investments money manager survey. Global institutional assets under management among the top 500 money managers reached $35.18 trillion as of Dec. 31, up 9% from 2012.
Strong equity markets, low volatility and an increased appetite from institutional investors for target-date funds and infrastructure assets, as well as a desire to diversify portfolios, drove AUM growth among the largest U.S. money managers in 2013.
“Equities had a home-run year,” said Zainul Ali, director and head of manager research, Americas, at Towers Watson & Co., Toronto, in a phone interview. “And when you combine that with low or managed volatility, it's not surprising that AUM increased.”
Mr. Ali added that, aside from bonds, most asset classes “did really well” in 2013.
“It was a good year for beta. And you're seeing flows in fixed income,” said Benjamin F. Phillips, a partner at Casey, Quirk & Associates LLC, Darien, Conn. “A lot of this is a story about beta.”
Equity market returns were strong in 2013. The MSCI All-Country World index returned 27.4% for the year; the MSCI Europe Australasia Far East index returned 22.8% and the Russell 3000 rose 33% for the year. Fixed-income returns were not so helpful. The Barclays U.S. Aggregate Bond index returned -2% for the year and the Citi World Government Bond index return was -4.6%.