Global assets to top $100 trillion by 2020

According to consulting firm PwC, global assets under management will grow at an annual compound growth rate of 6% to reach $101.7 trillion by 2020, up from $64 trillion in 2012.

The strongest growth in assets is set to come from South America, Africa and the Middle East – ahead of the developed world, although the majority of assets will still be concentrated in the US and Europe. PwC added that three key trends are the increase in mass affluent and high net worth individuals in the emerging market regions, the expansion of new sovereign wealth funds, and increasing defined contribution pension schemes, pushed by government action.

In 2012, PwC estimated that the asset management industry held 36.5% of assets held by pension funds, sovereign funds, insurance companies and the mass affluent and high net worth market. It said that the asset managers should be able to increase their share of this pie to 46.5% by 2020. It added that pension fund assets will grow by 6.6% to reach $56.5 trillion by 2020 from $33.9 trillion in 2012.

Commenting on asset management industry trends, PwC said that alternatives will become more mainstream and the proportion of actively-managed traditional assets, whilst remaining the core, will fall. PwC estimated that alternative assets will grow at a rate of 9.3% a year. It added: “2020 will see the emergence of a new breed of global managers, one with highly streamlined platforms, targeted solutions for the customer, and a stronger and more trusted brand. These managers will not only emerge from the traditional fund complexes, but from among the ranks of large alternative firms too.”