Opalesque Industry Update - Cerulli Associates estimates that growth in global assets under management will moderate to 6.1% over the next five years, with non-U.S. growth weaker at 5.8% on the back of the economic troubles in Europe and spill-over concerns in some emerging markets. |
The good news is that 2011 could have been so much worse for global assets under management; yet the bald facts are that rather than continuing the positive trend of the past three years, reality bit in 2011 and global asset slipped back marginally to US$53.8 billion, whilst maintaining positive growth on a compounded annual basis over the past four years, according to Cerulli's flagship international research report, Quantitative Update: Global Markets 2012.
Now in its eleventh iteration, this annual report covering both retail and institutional asset management globally believes the bigger concern is what will the rest of 2012 hold for the industry. "Whilst our current forecast for the rest of the year suggests an increase of just under US$3 trillion in assets for the industry as a whole, a lot will depend on how the U.S. does as reliance on Europe for growth for the rest of the year is optimistic," said London-based Shiv Taneja, managing director at the firm.
"The one thing that hasn't changed since last year is the growing impact that regulation is going to have on the future of the asset management industry. In Europe alone there is a "tsunami" of regulation coming over the next couple of years, with implications far beyond the continent" said Ken Yap, Singapore-based director at the firm. Coupled with very weak investor sentiment, and a decidedly uncertain market outlook it suggests weak growth for the short to medium term, added Mr Yap.
Europe and Japan accounted for the decline in assets on a regional basis, but the big relief for the industry was that in the U.S. assets stayed steady at US$27.5 trillion at the end of 2011, accounting for a full 50% of global assets under management. Diversification with a very clear focus on the bottom-line will be central to navigating the next few years in the global asset management industry, according to Cerulli's research.