Global Asset Management 2021: The $100 Trillion Machine (2024)

The asset management industry has emerged from the global pandemic in a position of strength, with assets growing by 11% in 2020 to end the year at $103 trillion. Retail portfolios, representing 41% of global assets at $42 trillion, grew by 11% in 2020, while institutional investments grew at a similar pace to reach $61 trillion, or 59% of the global market. Retail investors were the main driver of net inflow, contributing 4.4% of net new capital in 2020, twice the size of the contribution made by institutional investors (2.2%).

The world’s largest asset management region, North America, delivered another year of double-digit growth in 2020, with assets under management (AuM) increasing by 12% to reach $49 trillion. Growth was also strong in Europe (10%), Asia-Pacific (11%), and the Middle East and Africa (12%).

Yet across the board, profitability was largely flat in comparison with 2019, as costs and fee compression kept operating profits hovering at around 34% of net revenues.

As the global crisis recedes, it is becoming increasingly clear that asset managers are entering a new era that will require them to adapt to new ways of doing business. On the operations side, remote models for work and customer service have emerged as permanent fixtures. To remain competitive, firms must use advanced data and analytics for every process. On the revenue side, new asset classes, particularly within private markets and alternatives in general, will be crucial to growth during the next several years.

These new realities present challenges but also multiple opportunities for growth. Indeed, the next big task for all industry players will be to carve out a suitable growth strategy as they rethink every aspect of their business, from client engagement to investment products.

In BCG’s 19th annual report on the global asset management industry, we look at some of the most promising ways that asset managers can become private market investment leaders. Strategies include developing such products for retail investors, gaining an edge in advanced data and analytics, and moving to the forefront of environmental, social, and governance (ESG) strategies for private market portfolios.

In spotlighting private credit, we discuss the manifold investment opportunities available in a rapidly growing asset class that currently has $1 trillion in AuM. In addition, we examine the important role that asset managers have to play in steering their insurer clients into alternative strategies, as well as the industry’s escalation into next-generation distribution.

Asset managers that act as first movers and take advantage of growth opportunities are likely to establish a formidable edge well into the future.

Lubasha Heredia

Managing Director & Partner

New York

Simon Bartletta

Managing Director & Senior Partner

Boston

Joe Carrubba

Managing Director & Partner

New York

Dean Frankle

Managing Director & Partner

London

Chris McIntyre

Managing Director & Partner

New York

Edoardo Palmisani

Managing Director & Partner

Rome

Anastasios Panagiotou

Managing Director & Partner

Cologne

Neil Pardasani

Managing Director & Senior Partner

Los Angeles

Kedra Newsom Reeves

Managing Director & Partner

Chicago

Thomas Schulte

Alumnus

Ben Sheridan

Managing Director & Senior Partner

Singapore