AUSTRALIA - Global asset managers recorded their lowest growth for five years in 2007, as total assets managed by the world's largest 500 managers grew by only 9% to US$69.4trn, according to Watson Wyatt.
In contrast, the research found Australian fund managers performed strongly, with assets under management growing by 19% over the year 2007 to US$691bn.
Watson Wyatt Australia head of manager research Hugh Dougherty said: "Australian fund managers have on average grown faster than the global growth rate, with more than half climbing up the rankings.
"This is a result of compulsory flows from the superannuation guarantee system, the outperformance of the Australian share market relative to global share markets, and a strengthening of the Australian dollar in 2007."
Dougherty explained that the Australian managers who had increased their ranking position were those that were broadly diversified, but managers which focused purely on equities and property had a somewhat different experience.
"We would expect to see this trend being exacerbated by conditions since the end of 2007. Although many assets are down, equities and listed property trusts have been hit hardest", he said.
Dougherty added that pension funds' desire for a reduced exposure to equity risk would continue to drive specialisation and was likely to benefit some quality boutiques.
He concluded: "Innovation around benchmarks is likely to go from strength to strength as demand from pension funds for 'cheap' beta increases. This is all against a back drop of a very challenging current environment, with many managers facing significant falls in assets so far this year, with equity markets having fallen in excess of 30%."
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