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Cerulli finds larger asset managers get bigger on wave of consolidation

Tuesday, September 03, 2013
Opalesque Industry Update - Cerulli Associates' latest report finds that the 50 largest asset managers account for more than US$38 trillion in assets under management as at the end of 2012, a full US$4 trillion more than the year before, even as the biggest firms in the industry continue to enlarge. Eleven money managers have assets in excess of US$1 trillion (compared with nine a year ago), and there are twice as many firms with more than US$2 trillion in assets (four compared with two, previously), with BlackRock still the only global firm with assets in excess of US$3 trillion, according to the Cerulli Associates' flagship report, The Cerulli Report: Global Markets 2013.

Now in its 12th iteration, this annual report covering both retail and retirement asset management globally finds that while the trend for consolidation in the asset management industry is not a new one, "there has definitely been a quickening of pace since the financial crisis," says Shiv Taneja, the firm's London-based managing director for international research. The global financial crisis took US$10 trillion off the table in the space of a few months in 2008, and it also led to a consolidation of the industry as brand and balance sheet took center-stage-benefitting the bigger, capitalized managers. "Big firms can do many good-and not so good-things. Regulators have a huge role to play here, and in their desire to boost investor protection (a good thing) should ensure they do not make it tough on smaller firms," adds Taneja.

While concentration of the asset management industry is most obvious when the data is looked at in aggregate on a global basis, it is also evident when measured at a country level. For instance, six out of 10 selected countries show retail asset concentration levels (of the top 10 managers/record-keepers operating in that country) at more than 70%, while the figure for retirement assets is even higher, with seven out of 10 selected countries showing concentration levels (of the top 10 operators) in excess of 70%, according to new research in Cerulli's Global Markets 2013 report.

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