Updated with correction
Investment outsourcing gained steam as assets managed worldwide for institutional investors rose 26% in the year ended March 31.
In aggregate, $1.206 trillion was managed worldwide for institutions on a full or partially discretionary basis at the end of the first quarter, up from $955 billion a year earlier, Pensions & Investments' third survey of investment outsourcers shows.
(In 2013, P&I's data included only firms managing at least $1 billion in outsourced assets under investment management).
Thanks to a boom in liability-driven investment and increasing investment complexity, survey respondents' outsourcing programs worldwide — including advisory-only assets — grew 25% to $1.329 trillion in the year ended March 31 from $1.066 trillion as of the same date in the prior year.
The rank order of the four largest outsourcers based on worldwide assets under management for institutional investors remained unchanged from 2013:
- Russell Investments was in first place with $115 billion, up 6%;
- Cambridge Associates LLC, second, with $98.7 billion, a 12.9% increase;
- Mercer Investments, third, with $91.6 billion, a 23.9% rise; and
- SEI Investments Co., fourth, up 7% to $71.8 billion.
A new entrant, Wells Fargo & Co., ranked fifth, with $71.6 billion. (A Wells Fargo spokeswoman said in an e-mail that she was unable to arrange an interview by press time with Wells Fargo executives about the firm's outsourcing business because of scheduling conflicts.)