Volatile markets, declining oil prices and asset owners re-evaluating where to invest their capital pulled down money manager assets in 2015.
Worldwide institutional assets of the 500 largest firms in Pensions & Investments' annual money manager survey dropped 2.8% in 2015 to $36.12 trillion.
A number of factors — such as slowing population growth and the decline of traditional defined benefit plans — are affecting flows, said Kevin P. Quirk, a founding partner and chairman of money management consultant Casey, Quirk & Associates LLC, Darien, Conn., in a phone interview.
“You have a generation of people where you just have slowing or negative population growth. That's a real headwind,” Mr. Quirk said. “The emerging markets aren't developing at a fast enough rate to counterbalance that.”
These factors, as well as challenging capital market conditions that are leading investors to rethink how they allocate their portfolios, are causing outflows from traditional institutional money managers.
Despite Casey Quirk's long-term view that the traditional institutional market is shrinking organically by 1% per year, Mr. Quirk explained there still are a tremendous number of opportunities for managers, “because there's a lot of movement” within the industry.
“When you look at where demand falls today, investors continue to search for high-quality managers that can provide solutions and outperformance in places where they're trying to get exposure,” Mr. Quirk said.
There were few changes among the top 10 managers ranked by total worldwide institutional assets under management. Only two firms — Legal & General Investment Management (Holdings) Ltd. and Pacific Investment Management Co. LLC — changed position.