July 12, 2013

U.S. Remains Engine of Global Growth: Cerulli

Optimism returns as the United States powers growth in asset management, research firm says

Happy days are here again, at least according to a new report from Cerulli Associates.

The Boston-based research and consulting firm found global assets under management are set to cross $70.4 trillion by the end of 2013, a full $20 trillion higher than the industry's low point in 2008. It added that this is a conservative estimate that may need upward revision if the global financial markets continue to perform.

“The Cerulli Report: Global Markets 2013” covers both retail and retirement asset management globally, and reports that non-U.S. assets accounts for more than 50% of total assets, but the “engine of growth” remains the United States in the near term.

"It would be churlish not to feel a sense of optimism about the near- and medium-term outlook for the global asset management industry, especially when considering top-line growth," Shiv Taneja, Cerulli's London-based managing director, said in a statement. He adds that even Europe has managed to add $5.9 trillion in assets since 2008.

"The worry, however, is when considering bottom-line growth,” added Yoon Ng, associate director at Cerulli and one of the report's authors. “Here the picture is less well-defined, as many firms-large and small-continue to have to deal with the effects of the financial crisis and margin pressure. The sunny uplands may beckon, but a good guide is going to be essential."

The report shows that only Japan is slated to show slower asset growth than Europe over the next five years to 2017, but “there is no getting away from the fact that the United States is, and is likely to remain, the sweetest spot, from a global growth standpoint,” according to the report.

"Could it really get to be more than twice bigger than Europe, in asset terms, by 2017? It certainly appears so," Taneja said.

Cerulli's findings suggests that Asia ex-Japan will continue to show the highest growth rate over the five years to 2017, but this top-line figure “must be measured against the region's ability to generate consistently strongly bottom-line growth.”

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