An asset management firm invests pooled funds on behalf of its clients. Although hedge funds are likely the most well-known sort of asset management firm, there are many others, including those who manage mutual funds, ETFs, and index funds.
Many in the asset management business have found the first three quarters of 2022 to be difficult. Due to high inflation, increasing interest rates, and other reasons, global stock indices plunged over 20% and fixed income indices lost more than 10% in the first half of the year, marking one of the worst first-half performances in decades.
Market volatility hurts asset managers
Many asset managers’ expansion has been hampered as a result of the issues. Asset managers frequently charge a fee based on a percentage of the total assets under management (AUM) in exchange for managing assets. If the markets rise, total AUM may rise, and asset management may profit from increased revenues and maybe higher earnings per share (EPS).
However, if markets fall significantly, AUM may fall since organic asset inflows cannot entirely offset market falls, and asset managers may struggle to satisfy market expectations. In fact, many asset management companies listed on the NYSE or NASDAQ in 2022 haven’t done as well as expected. Many of them haven’t met projections for earnings per share or sales growth.
Despite the hurdles, many asset managers have previously endured periods of volatility and uncertainty, and the most successful have exploited such times to differentiate themselves from competitors and perhaps earn greater market share. Despite the volatility in 2022, many analysts expect several asset classes to rise over time.
The top ten asset managers
In this post, we will look at ten of the world’s largest asset management firms, as measured by AUM according to the most recent Q3 statistics.
1. Vanguard
AUM: $8.1 trillion
Vanguard is a financial organization that provides mutual funds, IRAs, exchange-traded funds, and retirement plans. Vanguard has established the first index mutual fund, implemented a commission-free distribution system, and institutionalized fixed income management since its inception over five decades ago. As a consequence of its expansion, Vanguard now has an AUM of $8.1 trillion, edging out BlackRock, Inc. for the top spot on our list of the world’s ten largest asset management firms.
To give you a better understanding of how much assets Vanguard’s fund managers truly have in their portfolios, we’ll say it’s around one-third of the United States’ GDP in 2022. Or the combined economies of Germany, the United Kingdom, and France. Alternatively, you might find it more fascinating if we place the statistics in the perspective of companies, with Vanguard’s AUM equaling the combined market capitalizations of Apple, Google, Amazon, and Facebook.
2. Blackrock
AUM: $7.96 trillion
In the third quarter, BlackRock’s assets under management (AUM) decreased 16% year on year to $7.96 trillion, as the higher dollar affected the value of investments in Europe and Asia. Following it, Vanguard jumped to the top of the list of the world’s top asset managers. However, these recent changes do not alter the fact that BlackRock has long been the undisputed ruler of managing other people’s money.
It is a huge public company with a market value of more than $106 billion. Institutional and individual clients all over the world use its investment and technology services.
The beginnings of BlackRock were in New York City as an institutional asset manager specializing in risk management and fixed income. Currently, the corporation operates on a global scale, with 70 offices in 30 countries and customers in 100 countries. The majority of BlackRock’s revenue comes from investment advisory and administrative fees.
3. Fidelity Investments
AUM: $3.69 trillion
Fidelity Investments, formerly Fidelity Management & Research, or FMR, is an American international financial services business with headquarters in Boston, Massachusetts. The business started in 1946 and is now one of the world’s top asset managers, with $3.69 trillion in assets under management as of Q3 2022.
Fidelity Investments manages a large family of mutual funds and offers fund distribution, financial advice, retirement services, index funds, wealth management, securities execution and clearing, asset custody, and life insurance.
Fidelity was the first major American finance corporation to promote mutual funds directly to regular people through direct mail advertising and door-to-door sales in the 1960s. Previously, mutual funds were almost exclusively promoted to high-income or high-wealth individuals, employer retirement funds, and/or those already in the finance business.
4. The Capital Group Cos. Inc.
AUM: $3.09 trillion
Capital Group is a financial services firm based in the United States. With approximately $3 trillion in assets under administration, it is one of the world’s oldest and largest investment management firms. It was founded in Los Angeles, California, in 1931 and is privately held. It has offices around the Americas, Asia, Australia, and Europe. The firm has grown through times of prosperity and uncertainty, as well as market bubbles and crashes.
Capital offers more than 40 mutual funds through its subsidiary, American Funds Distributors, as well as separately managed accounts (or collective investment trusts), private equity, investment services for high-net-worth investors in the United States, and a variety of other offerings for institutional clients and individual investors worldwide.
5. Amundi
AUM: $2.01 trillion
Amundi, a French asset management firm, is a leading European asset manager, with assets under management of 1.91 trillion euros ($2.01 trillion). The business was founded on January 1, 2010, as a consequence of the merger of Crédit Agricole and Société Générale’s asset management activities. Since November 2015, Amundi Group has been listed on the Euronext stock market. Crédit Agricole S.A. is its largest stakeholder.
Amundi engages in a variety of investment management businesses. The firm specializes in active management through a variety of mutual funds as well as passive management as an ETF issuer and index fund manager. Furthermore, the firm provides products in the real estate and alternative asset investing categories. Its offerings are geared toward both individual and institutional investors, and take the form of pooled investments or special mandates. Amundi is well recognized in France for its work in the field of French employee savings plans.
6. Wellington Management Company
AUM: $1.40 trillion
Wellington Management Company is a private, independent investment administration business situated in Boston, Massachusetts, with client assets under management totaling more than $1.4 trillion.
Its clients include central banks and other government institutions, pension funds, endowments and foundations, family offices, fund sponsors, insurance companies, financial intermediaries, and wealth managers.
The Wellington Fund, founded in 1928 by Philadelphia-based accountant Walter L. Morgan, was the first balanced mutual fund in the United States. The Wellington Management Company was founded in 1933.
7. Invesco Ltd.
AUM: $1.39 trillion
Invesco Ltd. is a worldwide investment business based in Atlanta, Georgia, that provides a wide range of investment vehicles in the major equity, fixed-income, and alternative asset classes. Invesco Ltd. had an AUM of $1.39 trillion as of the third quarter of 2022.
The company has further branch offices in 20 countries, and its common stock is a component of the S&P 500 and trades on the New York Stock Exchange.
Since 2000, Invesco has grown through acquisitions such as the ETF business PowerShares Capital Management. Besides, the reorganization of WL Ross & Co.
Shares of Invesco Ltd. are down 21% so far this year because the market is in a slump. The investors are still worried about rising interest rates and possible recession.
8. Franklin Resources, Inc.
AUM: $1.3 trillion
Franklin Resources, Inc. is an American international holding corporation known as Franklin Templeton, together with its subsidiaries. It is a global investment organization that started in New York City in 1947 as Franklin Distributors, Inc. The firm is traded on the New York Stock Exchange under the ticker code “BEN,” in honor of the company’s namesake, Benjamin Franklin, whom founder Rupert Johnson Sr. adored.
The company’s headquarters relocated from New York to San Mateo, California, in 1973. Franklin Templeton managed $1.4 trillion in assets under management (AUM) on behalf of private, professional, and institutional clients as of the third quarter of 2022.
The business has specialized knowledge in a wide variety of asset classes. It sells products under several brand names, including Franklin, Templeton, Mutual Series, and Fiduciary. The business offers a diverse range of products, but is best remarkable for bond funds under the Franklin brand. It operates overseas funds under the Templeton name, and value funds under the Mutual Series brand.
On May 31, 2022, BNY Mellon Investment Management said that it would sell Alcentra to Franklin Templeton. On November 1, 2022, the deal was finalized.
9. Rowe Price Group, Inc.
AUM: $1.23 trillion
Rowe Price Group, Inc. is a publicly traded worldwide investment management company based in the United States. It offers funds, subadvisory services, separate account management, and retirement plans and services to individuals, institutions, and financial intermediaries.
The company has head offices in Baltimore, Maryland. It has 5,000 workers as well as 16 foreign locations that serve clients in 47 countries.
Thomas Rowe Price, Jr. formed the business in 1937 and is most notable for creating the growth stock investment theory. After carefully choosing against a large endeavor in passive investing in 2019, the organization is now focused on active management.
Rowe Price was named one of the finest places to work in money management by Pensions & Investments. It was also one of Fortune’s most admired businesses in 2020.
10. Geode Capital Management
AUM: $975 billion
Geode Capital Management, LLC (Geode) is a Boston, Massachusetts-based investment management business.
Fidelity Investments founded Geode in 2001 to conduct systematic long/short equities strategies and to develop new strategies. Geode was split off as a separate business in 2003. One apparent motive was to prevent a potential conflict of interest caused by Geode shorting companies held by Fidelity mutual funds.
The Wall Street Journal covered the business in February 2021, calling it Fidelity’s “Secret weapon.” During the same month, the company shut down its hedge fund business due to derivatives losses.
Due to the popularity of index funds, Geode’s assets under management topped $1 trillion in the start of 2022. Geode has $975 billion in AUM as of the third quarter of 2022 and manage assets for both institutional and individual clients. Corporations, investment firms, pension funds, sovereign wealth funds, state and local government agencies, and charity organizations are all included. Equally, clients include both high-net-worth individuals and non-high-net-worth individuals in the United States.
