Global Assets Under Management Set To Exceed $100 Trillion By 2020 - PwC

Stephen Little

10 February 2014

Global assets under management are set to rise by six per cent a year to around $101.7 trillion by 2020, from a 2012 total of $63.9 trillion, driven by high net worth individuals, growth in emerging markets and sovereign wealth funds, according to new research from PricewaterhouseCoopers.

The report, Asset Management 2020: A brave new world, found that assets under management in South America, Asia, Africa and Middle East are set to grow faster than in the developed world in the years leading up to 2020, although the majority of assets will still be concentrated in the US and Europe.

PwC said assets under management in Europe will rise by 4.4 per cent to $27.9 trillion by 2020, from a 2012 total of $19.7 trillion. Assets owned by mass affluent and HNWI investors are expected to rise to more than $100 trillion and $76 trillion respectively by 2020, from more than $59 trillion and $52 trillion, respectively in 2012.

The growth is expected to be higher for the mass affluent sector than for HNWIs . The single greatest contributor to this surge in mass affluent and HNWI assets is increasing South America, Asia, Africa and Middle East wealth. Meanwhile, mass affluent clients in these regions will more than double their wealth between 2012 and 2020.

From $22.8 trillion and $17.0 trillion, respectively in 2012, assets owned by mass affluent and HNWI investors in Europe are expected to rise to $31.6 trillion and $21.6 trillion respectively by 2020. The growth is expected to be 4.2 per cent for the mass affluent sector and 3.1 per cent for HNWIs.

The report noted that the size of sovereign wealth funds is rising fast and their presence in international capital markets is becoming more prominent. Assets under management for sovereign wealth funds are currently above $5 trillion and PwC predicts this figure reach nearly $9 trillion by 2020. PwC said that sovereign wealth funds based in the Middle East and Africa will grow the fastest, with Asia Pacific also seeing a rapid rise in assets.

“Strong branding and investor trust in 2020 will only be achieved by those firms that avoid making mistakes that attract the ire of investors, regulators and policymakers. Asset managers must deliver the clear message that they deliver a positive social impact to investors and policymakers. The efforts required to satisfy investors and policymakers cannot be left to others," said Rob Mellor, asset management 2020 leader at PwC.

"The coming years will bring the industry higher volumes of assets than ever before which places more responsibility on firms to manage these assets to the best of their collective ability. Asset managers must clearly outline the value they bring to customers while being fully transparent over fees and costs,” said Mellor.