Global asset management industry sees assets declining
Assets of the world’s 500 largest asset managers have declined for the first time in five years, with the reduction being most pronounced among European firms.
According to the latest research jointly conducted by Pensions & Investments and Willis Towers Watson, global assets under management declined by 1.7% in 2015, with US assets decreasing by 1.1% to $76.7trn ((€69.6trn) compared to the previous year, European assets, including the UK, decreased by 3.3% to $25.1trn (€22.9trn).
Compared to the European average, UK-domiciled assets decreased slightly less, by 2% reducing the total assets under management to $6.6trn (€6trn).
Luba Nikulina, global head of manager research at Willis Towers Watson, comments on the results: “The decline in global assets demonstrates the impact of the challenging investment landscape and currency fluctuations on asset managers across the globe. In 2014 our research showed a dramatic slowdown in growth, yet assets managed by the largest 500 managers still grew by just over 2%.”
She adds that: “This year the figures are markedly different. The economic slowdown has impacted investment performance. At the same time, asset owners are rethinking their business models by internalising asset management capabilities at the larger end of the spectrum and consolidating at the smaller and mid-size end which also has an impact on capital flows to the industry. This trend will continue to put pressure on revenues and require asset managers to further adapt to this challenging and continuously changing environment.”
The research also revealed that actively managed assets, which continue to make up the majority of total assets under management (78.3%) fell by 2.8% in 2015, while passive assets declined at a faster rate of 5.5% during the year.