Global assets under management (AuM) is forecasted to increase to about $102 trillion by 2020 compared to total of $64 trillion in 2012, according to a new report from PricewaterhouseCoopers (PwC).
The latest forecast marks a CAGR of about 6%.
AuM in North America is predicted to grow at a CAGR of 5.1% to reach over $49 trillion by 2020 (from a 2012 total of $33.2 trillion), exceeding expected AuM for Europe, Asia Pacific and Middle East & Africa combined.
The report titled ‘Asset Management 2020: A brave new world’ found that the asset management environment is being reshaped by demographic changes, accelerating urbanization, technological breakthroughs and shifts in economic power.
As per the report, the increasing use of defined contribution (DC) plans, the increase of mass affluent and high-net-worth-individuals in the South America, Asia, Africa, Middle East (SAAAME) regions, apart from the expansion and emergence of new sovereign wealth funds (SWFs) with diverse investment goals, will be the drivers for the global growth in assets.
PwC global asset management leader Barry Benjamin said that most asset managers have not had time to bring the future into focus, amid unprecedented economic turmoil and regulatory change.
"However, as the industry stands on the precipice of a number of fundamental shifts and the potential for significant volumes of assets, there is more responsibility on firms than ever to manage these assets to the best of their collective ability," Benjamin added. PwC estimates that by 2020, pension fund assets in North America and will rise by 5.7% per year to comprise just above $30 trillion of the $56.5 trillion in total global assets.