Australian fund managers’ assets hit US$1.3 trillion
Total assets under management (AUM) of Australian fund managers grew 18.5 per cent to $1.3 trillion in 2017, according to a survey by Willis Towers Watson.
Total AUM of the world’s largest 500 managers grew to US$93.8 trillion, representing a rise of 15.6 per cent on the previous year, the survey found.
Concentration was also evident in some asset classes in Australia, particularly unlisted infrastructure where the majority of the assets are managed by only a handful number of infrastructure managers, the firm said.
“New entrants in this asset class require time to build out their businesses. The market remains very competitive in Australia,” said Dania Zinurova, head of manager research for Willis Towers Watson in Australia.
The global advisory also said that the concentration of assets managed by the 20 largest managers globally reached the highest level since inception in 2000, and now accounted for over 43 per cent of the top 500 managers’ total AUM.
The research showed North America-based managers represent the majority of assets (58.1 per cent), although their share fell slightly in 2017, the first fall since 2008. European managers represented 31.8 per cent of assets managed (the UK being 7.4 per cent), Japan 4.8 per cent and the rest of the world 5.2 per cent (including Australia representing 1.4 per cent).
Assets in each region grew in 2017. While the majority of total assets (77.6 per cent) are still managed actively, the share of passive assets has grown from 19.5 per cent to 22.4 per cent in the last five years. In 2017 passive assets grew 25 per cent.
“There is an increasing interest from investors in high conviction active strategies in Australia, specifically in equities, and we see boutique start-ups continue to emerge in this space. This is likely to be driven by investors looking for more value for money,” Zinurova said.
Recommended for you
Outflows from an Australian private markets fund manager have caused FUM at Pacific Current to decline by $1 billion in the last quarter.
Former RIAA chief executive Simon O’Connor has joined the ethical advisory panel at U Ethical Investors.
Financial services leaders are “all cashed up with nowhere to grow” when it comes to M&A activity, according to Deloitte, with 90 per cent saying they have strong balance sheets ready for an acquisition.
As fund managers are urged to diversify their product ranges, they are finding a faster way to do this is via an acquisition of existing firms but experts say it is not without potential culture clashes.
