The world’s 500 largest asset managers’ assets under management reached US$139.9 trillion at the end of 2024, a 9.4 per cent increase from the previous year, according to a new report by WTW’s Thinking Ahead Institute.
It found this increase was driven largely by North American asset managers, which reported an average increase of 13 per cent, equivalent to $88.2 trillion or 63 per cent of total AUM among the top 500 firms.
Read: World’s 500 largest asset managers’ AUM up 12.5% in 2023: report
Conversely, Japan-based asset managers registered a 9.5 per cent in AUM, highlighting regional disparities in economic and investment performance. The report noted the U.K., which was the second-largest asset management market in 2019, is likely to fall to No. 4 in the next five years, with France and Canada set to overtake it.
The Middle East has gained prominence as a strategic hub for asset managers, as regulatory reforms in the UAE, including updates to digital assets rules and the qualifying investment funds regime, are attracting global firms. Moreover, thematic opportunities in Shariah-compliant investing, environmental, social and governance and digital assets are aligning with national transformation agendas, making the region increasingly competitive.
Strategically, the industry is continuing to undergo a significant shift to passive investment strategies, which now account for 39 per cent of total AUM, a 6.1 per cent increase from the previous year. Meanwhile, actively-managed assets declined to 61 per cent, down 3.6 per cent year over year.
Read: Report finds world’s 300 largest pension funds’ AUM increased 10% in 2023
The top 20 asset managers further consolidated their influence, now controlling 47 per cent of total AUM, up from 45.5 per cent in 2023. Their combined assets rose to $65.8 trillion, with 15 U.S.-based firms representing 83.9 per cent of this segment. Among these, BlackRock Inc., Vanguard Group Inc. and Fidelity Investments retained their positions as the top three global managers, with BlackRock holding the top spot since 2009.
The report also found nearly half (47 per cent) of asset managers are investing in artificial intelligence for strategic, operational customer improvement purposes. However, adoption remains in its early stages, with 78 per cent of firms allocating less than 10 per cent of their technology budgets to AI. Despite this, the report found 61 per cent expect AI spending to grow over the next five years, while a similar percentage (64 per cent) expressed concern about AI-related risks.
“This study paints a vivid picture of an industry in transition,” said Jessica Gao, director of the Thinking Ahead Institute, in a press release. “We’re seeing a convergence of forces, from the rise of passive strategies and private markets to the growing influence of AI. These trends are reshaping the very foundations of asset management.”
Read: World’s 500 largest asset managers’ AUM down 13.7% in 2022: report