According to the survey, BGI had $1.48 billion in assets under management in 2001. Following in second place was Deutsche Asset Management, part of Deutsche Bank (up from fourth the year before), with Legal & General Group PLC in third place (up from fifth).
Credit Suisse Asset Management, part of Credit Suisse First Boston Corp., jumped significantly in the table from 18th to fourth place reflecting its purchase of the assets of the Sun Life Financial Services of Canada Inc. investment business, according to the survey.
According to Mercer, eight of the top 10 2001 managers were on the top 10 list for 2000 although their order has shift considerably – in part because of a shift in managers’ strategy away from sole focus on AUM.
“The continuing uncertainty of equity markets has forced managers to rethink their business models,” Mercer’s Julia Hobart said in a statement. “The game is now less dependent on pure asset growth and more driven by product mix and profitability.”
That product mix has, in part, been driven by the continuing weakness in worldwide equity markets, which has boosted attention to bonds (bond mandates up 52% in the last year versus 17% for equities).
According to Mercer, more managers are also turning to alternative investments – particularly real estate and hedge funds.
Finally, Mercer found that foreign money mangers – particularly US based – have been walking off with a greater market share. Of the top 20 European pension managers in the Mercer survey, 15 listed the US and one of their home countries, said Mercer, who estimated non-European managers now have an 8% market share versus a 2% share five years ago.
“The catalyst for change has been a growing pressure on pension funds to perform,” Hobart said. “It has driven a move to greater transparency, more specialist management, and, in turn, greater use of foreign managers with demonstratable track records.”
Mercer said it collected data on 180 fund managers from 18 countries. It only provided total assets under management data for BGI in its press release.