The global asset management industry showed some signs of recovery in 2023, with total assets under management rising 12% year-over-year to nearly $120 trillion, according to research by Boston Consulting Group.
However, the industry’s revenues increased just 0.2% in 2023, while costs rose 4.3% for the year. Overall, profits declined 8.1%.
AUM growth ranged from 16% in North America to 5% in Asia-Pacific markets, excluding Japan and Australia. U.K. AUM grew 2% in 2023, and it remains the largest market in Europe.
In 2023, passive strategies attracted 70% of total global mutual fund and exchange-traded fund net flows, totaling about $920 billion. From 2019 through 2022, only 57% of net inflows went into passive strategies.
The downward pressure on fees collected by assets managers also showed no signs of reversing in 2023. The average fee in 2023 was 22 basis points, down from 25 basis points in 2015 and 26 basis points in 2010.
Separately, BCG, in partnership with the Investment Company Institute and the CFA Institute, conducted a global survey of 57 asset managers with $15 trillion in AUM that focused on generative AI adoption.
Among the key findings in the survey was that 72% of the asset managers believed that artificial intelligence will have a significant or transformative impact on their organization within the next three to five years. However, only 16% have fully defined a strategy and are working on implementing it throughout the business.
“The structural challenges facing the industry will only continue to grow,” said Dean Frankle, a managing director and partner at BCG, in a news release. “To remain competitive, asset managers will need to seize the opportunities offered by artificial intelligence and double down on investing in enhanced productivity, product personalization, and the opportunity of private markets.”
The data collected by BCG was published in the 22nd edition of its Global Asset Management Report, with this edition titled "AI and the Next Wave of Transformation."
