Global AUM up 8% in 2014; institutional inflows flat

Global assets under management grew to a record $74 trillion as of Dec. 31, up 8% from a year earlier, said a report from Boston Consulting Group.

Of that total, more than $45 trillion, or 61%, came from institutions.

Despite the growth in assets, money managers in 2014 “were unable to capture net new money from institutional investors,” said Gary Shub, a partner at BCG and a co-author of the report, at a briefing on Tuesday.

Mr. Shub said the primary reason for this was due to institutional asset owners increasingly managing assets internally.

“We've seen large institutional investors choose to bring some assets in-house,” he added, citing such assets as infrastructure and real assets. “They're also facing significant fee pressures, causing them to bring assets in-house.”

The firm noticed sovereign wealth funds and pension funds going in this direction in 2014.

The firm's 13th annual global asset management report showed that most asset growth was due to rising asset values on global markets rather than new net inflows. New net inflows last year were 1.7% of 2013 assets under management, compared with 1.6% of 2012 AUM in 2013. Net inflows are still nowhere near the peak level of 5.7% in 2006.

Money manager profits in absolute terms rose to $102 billion in 2014, up 10% from 2013. Net revenues were at 28.8 basis points in 2014, down 0.6 basis points from the year before and 5.4 basis points below their pre-crisis peak of 34.2 basis points in 2007.

Broken down by region, North America had the highest percentage of total AUM as of Dec. 31, at 50%. Europe came in second, at 30%. Japan and Australia managed 9% of the assets; Asia ex-Japan and Australia held 7%; and Latin America had 2%, as did Middle East and Africa.