World's largest investment managers see assets hit $128 trillion in return to growth

Core Insights - Total assets under management (AUM) at the world's 500 largest asset managers reached USD 128.0 trillion at the end of 2023, marking a 12.5% annual growth and a recovery from a significant drop in 2022 when AUM fell by USD 18 trillion [1][2] - Passive investment strategies now account for 33.7% of AUM among the largest investment managers, indicating a shift in investment strategies, although active strategies still dominate [1][2] - North America experienced the largest growth in AUM with a 15.0% increase, while Europe saw a 12.4% rise; Japan experienced a slight decline of 0.7% [2][4] Asset Class Allocations - Core equity and fixed income remain dominant, comprising 77.3% of total AUM (48.3% equity and 29.0% fixed income), though this represents a slight decrease of 0.2% from the previous year as investors seek alternatives [2][4] - The growth in private markets is noted, as investors are increasingly turning to private equity and other illiquid assets for returns [2][4] Individual Asset Managers - BlackRock remains the largest asset manager with AUM exceeding USD 10 trillion, followed by Vanguard Group at nearly USD 8.6 trillion; Fidelity Investments and State Street Global rank third and fourth respectively [3][6] - Notable risers in the rankings include Charles Schwab Investment, which moved up 34 places to 25th, and Geode Capital Management, which rose 31 places to 23rd [3][6] Market Dynamics - The asset management industry has seen consolidation and change, with macroeconomic factors such as high interest rates impacting various asset classes and investment styles [4][5] - There is a continued trend of net flows into passive strategies due to their lower fees and simplicity, although market volatility raises caution among some investors [5][6] - Asset managers face pressure to evolve their business models, emphasizing the need for technology investment to meet client expectations and adapt to competitive pressures [5][6]