Worldwide assets under management by veteran investment firms rose 75.1% to $39.758 trillion in the 10 years ended Dec. 31, based on data collected for Pensions & Investments' annual money manager survey.
Over the decade, which encompassed a deep market downturn after the 2008 financial crisis followed by a record U.S. equity bull market, large money managers experienced average growth of worldwide AUM of 71.6% and median growth of 43.6%, an analysis of P&I data showed.
Aggregate worldwide assets of the 10 largest money management firms within this veteran universe totaled $26.1 trillion as of Dec. 31, up 110% from Dec. 31, 2007, and the assets managed by those firms accounted for 65.6% of total universe assets. (The group was composed of 29 managers that responded to P&I's survey with at least $250 billion in worldwide assets as of Dec. 31, 2007, and were still in operation as of Dec. 31, 2017. Included in each manager's total were net assets gained through acquisitions of at least 51% ownership in other money managers as well as net investment gains and net asset flows.)
Observers predicted the next decade would be more challenging for money managers, particularly regarding the degree to which performance impacts net inflows.
"In the past, there was always a question of which was more important for asset growth — performance or distribution," said Sean A. McKee, national practice leader-public investment management, KPMG LLP, New York. He added that going forward, "without stellar performance, you likely will not hold onto assets just because you have good distribution."
In the 10 years ended Dec. 31., BlackRock Inc. topped P&I's veteran universe ranking with $6.288 trillion in worldwide AUM, up 364%. Following was Vanguard Group Inc., with asset growth of 262% to $4.94 trillion over the same period.
Both firms also experienced high growth in U.S. institutional tax-exempt assets during that time frame: BlackRock's assets increased 572% to $1.545 trillion, while Vanguard's AUM rose 264% to $1.373 trillion.