Top 20 managers lift share of global market

The largest 20 funds managers in the world lifted their combined market share last year as the industry recovered from two years of funds under management outflows.

According to the annual survey of the largest 500 managers in the world by TowersWatson and Pensions & Investments magazine, total FUM increased 16.1 per cent to $62 trillion as at December 2009, after a fall of nearly 20 per cent in 2008.

The largest 20 managers continued to grow faster than the rest of the pack, increasing their share of the top 500’s assets from 38.3 per cent to 40.2 per cent. Over the past 10 years, the average growth rate of the top 20 was 7.2 per cent, compared with 5.7 per cent for the whole 500.

However, the top 20 also tend to be the most acquisitive, with the figures including many mergers and acquisitions in that time. Last year, BlackRock merged with Barclays Global Investors to form the largest funds management firm by a wide margin, with $3,346 billion in FUM. State Street Global Investors jumped over Allianz Group during the year to take second spot with $1,911 billion. There were 12 US-based managers in the top 20. Overall, North American managers had $30.6 trillion in FUM – almost half of the world’s assets held by the largest 500 firms. The ones in the top 20 managed 62.7 per cent of the assets in that group.

Apart from the continuation of the US domination of the marketplace, other trends included a sharp decline for Japanese managers, a further rise for managers in emerging markets and a rise for managers in Continental Europe versus the UK.

But the survey results mask the true picture in individual countries. In Australia, for instance, total FUM by the 15 managers in the top 500 has declined as a proportion of the universe. But in that market, a plethora of specialist and boutique managers have sprung up in the past 10 years. These managers have attracted the bulk of the institutional investment from Australia’s pension funds.

Bank-owned firms make up half of the world’s top 20, while three are owned by insurance companies and seven are independent.

Assets managed by passive managers shot ahead by 62 per cent last year, partly due to the BlackRock/BGI merger muddying the waters.

The top 20 managers as at December 31, 2009, were:

1. BlackRock ($3,346b)
2. State Street ($1,911b)
3. Allianz Group ($1,859b)
4. Fidelity Investments ($1,699b)
5. Vanguard Group ($1,509b)
6. AXA Group ($1,453b)
7. BNP Paribas ($1,326b)
8. Deutsche Bank ($1,261b)
9. JP Morgan Chase ($1,252b)
10. Capital Group ($1,179b)
11. Bank of New York Mellon ($1,114b)
12. Credit Agricole ($918b)
13. UBS ($876b)
14. Goldman Sachs ($871b)
15. HSBC ($857b)
16. Bank of America ($750b)
17. Natixis ($724b)
18. Legg Mason ($682b)
19. Prudential, US ($667b)
20. Northern Trust ($627b)

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