The II 300
America’s Biggest Money Managers The storm raging in credit markets has swamped investment banks and lenders, but the U.S. asset management industry keeps cruising along. In 2007 assets of the 300 largest managers, the Institutional Investor 300, increased 12.2 percent, to $34.9 trillion. The growth rate is slower than in recent years, but it is more than double that of the Standard & Poor’s 500 index, which rose 5.5 percent last year.
Barclays Global Investors and State Street Global Advisors hold their positions at the top of the ranking. Barclays, with $2.08 trillion in assets under management, grew 15 percent, while the State Street Corp. unit was up 13 percent, to $1.97 trillion.
Money management also remained phenomenally lucrative, with profit margins at most firms in the low to mid-30s. High-margin alternative investment products grew faster than any other asset class II tracks for the II 300, rising 46 percent, to $1.88 trillion, and breaking 2006’s record of 39.8 percent growth.
The view ahead, however, does not look rosy. The economy and the housing market show no sign of stabilizing yet, and investment returns are expected to fall — and profit margins to narrow — at least through the end of this year. “I’m not going to tell you we have hit the bottom. It feels that way, but we could have another leg of a stool falling tomorrow,” says Laurence Fink, chief executive of BlackRock, which holds steady in fifth place in the II 300, at $1.36 trillion.
Choosing America’s Biggest Money Managers
The II 300 ranks America’s largest money managers by assets under management. In conformity with the traditional view of the money management business, assets are defined as discretionary assets under management for the account of customers for which an organization has contractual authority to make buy and sell decisions. We ask firms to report assets under management for their entire organization--including subsidiaries. The ranking includes insurance companies, banks, investment management firms, internally managed pension funds, mutual fund companies and hedge funds. Domestic and non-U.S. equities include convertibles. ADR’s are included in non-U.S. equities. Domestic and non-U.S. fixed income include preferred stock and mortgage-backed securities. Real estate includes debt and equity. Alternative investments may include derivatives, venture capital, oil & gas, timberland, and hedge fund investments. Tax-exempt assets represent assets from tax-exempt sources, such as pension funds, foundations and endowments.