AuM of China fund managers surpasses US$1 trillion in the global 500
Hong Kong, 30 October 2017 – Total assets under management (AuM) of the world's largest 500 managers grew to US$81.2 trillion in 2016, up 5.8% on the previous year, according to latest figures from Willis Towers Watson's Global 500 research.
The research, which takes into account data up to the end of 2016, shows that AuM for Asia Pacific managers in the global ranking totalled US$6.9 trillion, up 1.3% on the year. Japan at US$4.7 trillion, represents the largest share of the assets managed by managers domiciled in Asia Pacific, followed by Australia with US$1.1 trillion. Assets managed by 21 mainland Chinese managers amounted to approximately US$1.1 trillion in 2016, which would rise to US$1.2 trillion if the AuM of four Hong Kong managers (US$123 billion) is included.
The research also shows that during the five-year period from end-2015 to end-2016, there was an increase in the representation of managers from mainland China (from 0.3% in 2011 to 1.3% in 2016) among the top 500 managers. In contrast, the representation of managers from Japan declined during this period from 8.4% in 2011 to 4.6% in 2016. The share of total assets managed by Australia and South Korea managers has been relatively stable during the period.
Harvest Fund Management (ranked 109) is the largest among the 21 mainland Chinese managers who responded for the survey, followed by China Asset Management (ranked 123) and CCB Principal Asset Management (ranked 153).
Richard Tan, Head of Manager Research for Asia at Willis Towers Watson, said: "Given the scale of the retail and private wealth sectors in mainland China, we believe the expanding population of middle- and higher-income individuals still offers the potential for stronger asset gth for managers in China. The institutional space has also experienced fast-ging demand for third-party asset managers to manage a portion of assets outsourced by Chinese institutions, largely benefiting established local players and those affiliated with financial institutions."
The research found that AuM for North American managers increased by 7.7% over the same period and now stands at US$47.4 trillion, while assets managed by European managers, including the UK, increased by 2.8% to US$25.8 trillion. However, UK-based firms saw AuM decline for the second consecutive year, falling by 4.5% in 2016 to US$6.3 trillion.
Although the majority of total assets (78.4%) are still managed actively, its share has declined from 79.7% from end of last year as passive management continues to make inroads.
Richard Tan said: "It is encouraging to see a return to gth in total global assets, suggesting that managers are finding success in attracting investors towards innovative solutions to achieve superior risk-adjusted returns. While passive assets remain significantly smaller than actively managed assets, the proportion of passively managed assets has gn from 16.5% to 21.6% over the last five years alone. We expect this trend will continue to put downward pressure on traditional fee structures, particularly among active managers seeking to remain competitive and to maximise value to investors."
The 20 largest asset managers experienced a 6.7% increase in AuM, which now stands at US$34.3 trillion, compared to US$26.0 trillion ten years ago. The share of total assets managed by this group of 20 largest managers increased for the third year in a , rising from 41.9% in 2015 to 42.3% by the end of 2016. Despite this, the bottom 250 managers experienced a superior gth rate in assets managed, rising by 7.3% over the year.
As with previous years, equity and fixed income assets have continued to dominate, with a 78.7% share of total assets (44.3% equity, 34.4% fixed income), experiencing an increase of 3% combined during 2016. Continuing from the strong gth they experienced in 2015, assets in alternatives saw a 5.1% increase by the end of 2016, closely followed by equities at 4.1%.
Richard Tan said: "Alternatives continue to g in popularity, with investors remaining under pressure to find effective means of diversification in an environment of lower expected returns from traditional asset classes. These strategies often come with greater complexity and require superior risk management. We see this as linked to the gth in assets managed by managers in the bottom half of our list, suggesting that investors favour smaller investment houses with specialist investment skills."
Richard Tan added: "Our research has highlighted awareness in sustainable investing, with 78% of the firms surveyed acknowledging a ging interest from their clients for these sorts of strategies as they continue to look for ways to add value for clients."
While BlackRock retains its position at the top of the manager rankings for the eighth consecutive year, further insight shows the main gainers, by rank, in the top 50 during the past five years. These include: Dimensional Fund Advisors (+31 [76 to 45]); Affiliated Managers Group (+20 [52 to 32]); Nuveen (+16 [36 to 20]); New York Life Investments (+15 [55 to 40]); and Schroder Investment Management, (+15 [59 to 44]).
Ranked by total assets under management, in U.S. millions, as of Dec. 31, 2016
| Global Rank | Manager | Market | Assets |
|---|---|---|---|
| 1 | BlackRock | U.S. | $5,147,852 |
| 2 | Vanguard Group | U.S. | $3,965,018 |
| 3 | State Street Global | U.S. | $2,468,456 |
| 4 | Fidelity Investments | U.S. | $2,130,798 |
| 5 | Allianz Group | Germany | $1,971,211 |
| 6 | J.P. Morgan Chase | U.S. | $1,770,867 |
| 7 | Bank of New York Mellon | U.S. | $1,647,990 |
| 8 | AXA Group | France | $1,505,537 |
| 9 | Capital Group | U.S. | $1,478,523 |
| 10 | Goldman Sachs Group | U.S. | $1,379,000 |
| 11 | Prudential Financial | U.S. | $1,263,765 |
| 12 | BNP Paribas | France | $1,215,482 |
| 13 | UBS | Switzerland | $1,208,275 |
| 14 | Deutsche Bank | Germany | $1,190,523 |
| 15 | Amundi | France | $1,141,000 |
| 16 | Legal & General Group | U.K. | $1,099,919 |
| 17 | Wellington Mgmt. | U.S. | $979,210 |
| 18 | Northern Trust Asset Mgmt. | U.S. | $942,452 |
| 19 | Wells Fargo | U.S. | $936,900 |
| 20 | Nuveen | U.S. | $881,748 |
Source: P&I/Willis Towers Watson World 500
Ranked by total assets under management, in U.S. millions, as of Dec. 31, 2016
| Global Rank | Manager | Market | Assets |
|---|---|---|---|
| 31 | Sumitomo Mitsui Trust Holdings | Japan | $699,484 |
| 36 | Nippon Life Insurance | Japan | $647,484 |
| 39 | Mitsubishi UFJ Financial Group | Japan | $584,765 |
| 52 | Macquarie Group | Australia | $362,511 |
| 57 | Meiji Yasuda Life Insurance* | Japan | $306,716 |
| 61 | Shinkin Central Bank* | Japan | $296,976 |
| 62 | Nomura Asset Mgmt. | Japan | $295,943 |
| 78 | Sumitomo Life Insurance* | Japan | $221,963 |
| 92 | Samsung Group | South Korea | $180,206 |
| 102 | Colonial First State | Australia | $147,154 |
| 106 | Resona Holdings | Japan | $139,687 |
| 109 | Harvest Fund Mgmt. | Mainland China | $136,221 |
| 112 | Nikko Asset Mgmt. | Japan | $133,349 |
| 120 | AMP Capital | Australia | $119,476 |
| 123 | China Asset Mgmt. | Mainland China | $115,367 |
| 126 | Mizuho Financial Group | Japan | $109,690 |
| 146 | Mirae Asset Financial Group | South Korea | $87,404 |
| 152 | Pacific Century Group | Hong Kong | $82,700 |
| 153 | CCB Principal Asset Mgmt. | Mainland China | $82,668 |
| 160 | Hanwha Group | South Korea | $77,835 |
Source: P&I/Willis Towers Watson World 500
* As of March 31, 2016
Ranked by total assets under management in U.S.$ millions, as of Dec. 31, 2016
| Market | Number of managers in the global ranking |
Assets | Share of the global 500 |
|---|---|---|---|
| Japan | 18 | $3,748,303 | 4.6% |
| Australia | 21 | $1,124,563 | 1.4% |
| Mainland China | 21 | $1,065,043 | 1.3% |
| South Korea | 19 | $684,000 | 0.8% |
| India | 7 | $148,423 | 0.2% |
| Hong Kong | 4 | $122,663 | 0.2% |
| TOTAL | 90 | $6,892,995 | 8.5% |
Source: P&I/Willis Towers Watson World 500
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