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Laxman Pai, Opalesque Asia:

Based on sheer growth in assets under management (AUM), 2020 was the second-best year since the financial crisis, and the global asset management industry reached an all-time high of $115 trillion (a 9.4% increase from $104 trillion at the end of 2019).

Moreover, growth went beyond asset appreciation: net new flows from clients clocked in at an impressive 2.7 percent of beginning-of-year AUM, said McKinsey. According to the paper, 2020 was the second-best year for the industry since the financial crisis of 2008-09.

In North America, AUM rose 13 percent in 2020, including net new flows of 2.3 percent (well above the average of the five years prior). Organic growth was broad-based, with five of seven major client categories showing positive net flows.

Industry profits reached a new record of close to $73 billion, despite an acceleration in the mix-shift to lower fee asset classes and vehicles in 2020. Fee compression ticked slightly higher to 3 percent, versus about 2 percent annually over recent history.

Finally, the industry's cost base grew $8 billion, at a faster pace than in the pre-pandemic years-6 percent versus a longer-term average of 4 percent. All in, revenues and operating profits grew 7 percent and 9 percent, respectively (relative to AUM growth of 13 percent).

From a vehicle standpoint, ETFs have been a clear winner. Net new flows into ETFs reached $508 billion in 2020, a record that was already exceeded in July of 2......................

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