Assets under management at the 500 largest advisors in the world rose 16% in 2009 to $62 trillion, after contracting 23% the year before, according to Towers Watson and Pensions & Investments.
This was the second-highest gain in assets in one year since the two organizations started the ranking in 1996. However, assets are still below 2006 levels, and half of these managers have been growing assets through acquisitions over the past five years, as opposed to via organic growth.
Stock markets also remain fragile and volatile, reflecting "the weak underlying economic fundamentals and the oscillating risk appetites among institutional investors," noted Carl Hess, global head of investment at Towers Watson.
The report also found that the top 20 managers' market share grew from 38% to 40%, but that bank-owned companies dominate their ranks. Among the top 20, 12 are U.S.-based investment managers, in control of 63% of the assets, up from 51%. The other eight managers are European-based.
"The larger firms were again the main beneficiaries of the rebound and increased their share of total assets to the highest levels since the research began," Hess said. Most asset managers are now poised to return to profitability, helped by market returns, net inflows, performance fees and reduced overheads.
Over the past 10 years, asset managers in developing countries have doubled their share of assets to 4%. Japanese asset managers' AUM, meanwhile, have fallen to 7%, down from 13%.
80% Plan to Work to 70 To Regain Losses
Whereas a year ago 64% of American workers expected to work at least another three years to recoup the losses taken in their retirement accounts as a result of the financial crisis, 80% now are planning to remain in the workforce another three years to age 70 or older.
And not too many see themselves sitting pretty in retirement. Only 20% are confident they will fully rebuild their financial losses, only 42% think they will be able to take care of basic living expenses, and only 20% think they will have enough money to pay for medical expenses.
This is according to Sun Life Financial's "Unretirement" Index, with Sun Life this year dubbing 70 "the new 65."
"The trend toward working longer into so-called retirement years has been increasing because of tough economic times," said Bill Novelli, former CEO of AARP and now a professor at Georgetown University. But despite the willingness to work, with unemployment so high, older Americans as well as all age groups are facing stiff competition for jobs, Novellli noted. In the fall of 2008, before the crisis was felt throughout the nation, the most popular reason for working past traditional retirement age was "to stay mentally engaged." Now, workers just as frequently say it's "to earn enough money to live well."
Quote of the Week
"The scenario of the next three to five years is that employment and housing will remain under pressure, and global debt deleveraging will continue for seven years."
- John Brynjolfsson
Chief Investment Officer