BlackRock Inc. retained its dominance in the P&I survey — ranking first in worldwide institutional assets, up 6% to $3.05 trillion, and U.S. institutional tax-exempt assets, which gained 7.4% to $1.15 trillion.
BlackRock has become increasingly dependent on its iShares exchange-traded funds division for its growth, and the unit delivered for the company in 2014, pulling in $100.6 billion of net inflows in 2014, topping the old record of $88.6 billion in 2008.
iShares accounted for 28.8% of firmwide revenue in 2014, up from 25.5% two years earlier, company financial filings show. When it comes to base fees generated by BlackRock's money management operations, excluding advisory and solutions fees, ETF revenue made up 33.3% of all fee income in 2014, up from 29.5% two years earlier.
Vanguard Group Inc. ranked second in the rankings, supplanting State Street Global Advisors. Vanguard's worldwide institutional AUM gained 8.3% to $1.82 trillion at year-end; in U.S. institutional tax-exempt, the firm's assets were up 16% to $853.1 billion.
SSgA, slipping to third, had $1.82 trillion in worldwide institutional assets and $826 billion in U.S. institutional tax-exempt assets.
Another strong showing in 2014 came from J.P. Morgan Asset Management, particularly in the growth of U.S. institutional tax-exempt assets: JPMAM experienced a 19.6% increase from the previous year to $329.8 billion, moving up one spot in the rankings.
The one clear loser among the top 10 firms was Pacific Investment Management Co. LLC. PIMCO entered 2014 in outflow mode, due to performance issues in its flagship Total Return Fund. By the end of the year, both Mohamed El-Erian, CEO and co-chief investment officer, and William H. Gross, co-founder, co-CIO and manager of the Total Return Fund, had left, and assets were in a rapid decline.
PIMCO's worldwide institutional assets fell nearly 17% as of Dec. 31, to $1.11 trillion.
Vanguard benefited in 2014 from its leadership as a low-fee index fund manager, said Michael Rosen, founder and CIO at Angeles Investment Advisors LLC, Santa Monica, Calif. “Passive has gained a lot of interest and money because active equity managers have had performance challenges,” Mr. Rosen said.
Martha King, managing director and head of Vanguard's institutional investor group in Malvern, Pa., said growth had been particularly strong in Vanguard's target-date funds. The unbundling of defined contribution plans had led sponsors to look at new investment options. “It has created an opportunity for us,” Ms. King said.
To a lesser degree, Ms. King said, Vanguard picked up some fixed-income assets that had been managed by PIMCO. She noted, however, that Vanguard officials made a decision not to actively pursue former PIMCO clients because officials did not want to be seen as taking advantage of the situation.
At J.P. Morgan Asset Management, where the company had $49.5 billion in net inflows in 2014, George Gatch, head of institutional and funds business in New York, attributed the gain to active management. Mr. Gatch said JPMAM was able to take advantage of increased interest in target-date funds as DC plans unbundled. He said the firm also saw strong inflows into multiasset portfolios as institutional investors looked to reduce volatility in equity strategies and generate income in a low-rate fixed-income environment.
Mr. Gatch said the firm also saw net inflows into liability-driven investing and private equity.