The world's 500 largest money managers have seen their assets grow to a new record high, despite challenges brought on by COVID-19, analysis by the Thinking Ahead Institute has found.
The findings show that assets at the top 500 managers stood at $119.5trn (£86.4trn) at the end of 2020, which was 14.5% higher than the $104.4trn recorded at the end of the previous year.
BlackRock retained its position as the largest asset manager, followed by Vanguard, which held its second place position for the seventh consecutive year.
The analysis also confirmed a growing concentration of assets among the top 20 managers, whose market share increased to 44%.
Of the top 500 managers, 221 names which featured on the list in 2011 are now absent in 2021, demonstrating a quickening pace of competition, consolidation and rebranding.
Another striking finding was the growing prevalence of environmental, social and governance (ESG) considerations, with client interest in sustainable investing increasing across 91% of the firms studied.
“We have witnessed unprecedented change within the investment industry – accelerated dramatically by the pandemic,” said Roger Urwin, co-founder of the Thinking Ahead Institute. “In particular, sustainability is no longer just a luxury for some firms.
“Asset managers have always had the ambition to develop and innovate. We have seen this particularly with ESG mandates, which increased by 40% in 2020. The biggest contributor to this was the growth in ESG exchange-traded funds (ETFs).”
Of the top 20 asset managers, 14 are from the US, accounting for 78.6% of the top 20's assets under management. On the whole, passive investments represent 26%, an increase of 16.2%, compared to 15.4% growth in actively managed assets.
According to the research, passively-managed assets under management among the largest firms grew to a total of $8.3trn in 2020, up from $4.8trn in 2016.
Outsourced chief investment officers, total portfolio approach and ETFs have all been popular sources of growth.
The research also found that 50% of managers increased the proportion of minorities and women in top positions over the course of the last year
Urwin added: “During the pandemic, asset managers from all corners of the world have became even more aware of the interconnectedness of the financial system with society and the environment.”
Image credit: iStock
Author: Chris Seekings