GLOBAL AUM TO EXCEED $100 TRILLION BY 2020
New York -- Global assets under management are expected to rise to approximately $102 trillion by 2020, with nearly 50 percent of them in North America, according to a new report by Big Four firm PwC, Asset Management 2020: A brave new world. The report found that global assets under management will increase to roughly $102 trillion by 2020 from a 2012 total of $64 trillion, a compound annual growth rate of nearly 6 percent. The projected expansion fits in with PwC's recently released Global CEO Survey, in which the growth projections of asset management CEOs eclipsed CEOs from numerous other sectors.
AUM in North America is predicted to grow at a compound annual rate of 5.1 percent to over $49 trillion by 2020, from a 2012 total of $33.2 trillion, exceeding the expected AUM for Europe, Asia Pacific, the Middle East and Africa combined.
According to the report, the asset management environment is being reshaped by several significant global megatrends, including demographic changes, accelerating urbanization, technological breakthroughs and shifts in economic power.
At the client level, PwC predicts that the global growth in assets will be driven by three key factors: the increasing use of defined-contribution plans partly driven by a government-incentivized or government-mandated shift to individual retirement plans; the increase of mass affluent and high-net-worth-individuals in South America, Asia, Africa and the Middle East, where economies are set to grow faster than those in the developed world in the years leading up to 2020; and the expansion and emergence of new sovereign wealth funds with diverse agendas and investment goals.
In 2012, the asset management industry managed 36.5 percent of assets held by pension funds, sovereign wealth funds, insurance companies, mass affluent and high-net-worth-individuals. If the industry is successful in penetrating these client assets further, PwC believes the share of managed assets can increase to a level of 46.5 percent.
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