North America-based money managers recorded a 20.3% increase in assets under management in 2019 to $62.32 trillion, driven by exceptional gains in U.S. equity markets.
AUM for North America-based firms accounted for 59.7% of total assets vs. 56.7% the year before, according to the Pensions & Investments and Willis Towers Watson PLC's Thinking Ahead Institute ranking of the top 500 managers. In 2019, U.S.-based assets under management accounted for 54.6% of the total, up from 51.7% in 2018.
Benjamin F. Phillips, principal and lead investment management strategist at Casey Quirk, a practice of Deloitte Consulting LLP, based in New York, said the jump could be attributed to a big bull market in the U.S. "Part of it is due to capital market appreciation. You had a big bull market run up to the end of 2019," he said, adding that assets in North America also saw organic growth from new contributions. "That's still going to grow over the next decade," he added.
Assets managed by firms in Europe increased 5.3% in 2019 to $29.79 trillion, increased 24.9% in Japan to $5.62 trillion and grew 4.5% for managers domiciled in the "rest of the world" to $6.66 trillion.
Longer term, managers based in China showed the highest compound annual growth rate for assets under management in both local currency and in U.S. dollar terms at 25.5% and 22.3%, respectively, over the past five years. "China's growth is not a surprise," Mr. Phillips noted. "A lot of (assets in China) used to be managed by shadow wealth systems, private wealth managers and domestic players that aren't money management firms," he said. "You have seen a conversion (of these assets) into asset management assets" following changes in the Chinese regulatory rules, he said, adding that regulated money managers will in the future take on more of these assets.
India-domiciled firms recorded a five-year CAGR of 14.4% in local currency and 11.9% in dollar terms to a total AUM of $216.1 billion. Brazil-based firms recorded a five-year CAGR of 12.9% in local currency and 4% in dollar terms, while Australian firms' five-year CAGR was 11.9% in local currency and 8.5% in dollar terms.
Meanwhile, U.S.-based managers recorded a 7% five-year CAGR and eurozone countries had a five-year CAGR of 4.5% in euro terms and 2.8% in dollar terms. Japan-based firms recorded a 5.6% CAGR in local currency and a 7.6% increase in U.S. dollar terms and managers domiciled in the U.K. had a five-year CAGR of 4.9% in pound sterling terms and 1.4% in dollar terms.