Asset management firms do precisely what their name implies: they manage money for clients and help them grow their assets. These firms hire experts to manage money on clients’ behalf, either actively or passively.

• Active management involves appointed financial experts making regular buy, hold, and sell decisions with the funds entrusted into their care. The portfolio manager or management team actively oversees the assets assigned to their care and collects fees for their service.

• Passive management involves purchasing assets held in a benchmark index, e.g., the S&P 500 Index. There’s little direct involvement because the funds are invested in an index already curated by someone else.

Passive management aims to replicate a benchmark’s performance, while active management seeks to outperform a specific benchmark. The latter has higher risks but also the potential for higher rewards. The former has lower risk and stable returns.

Asset management firms invest in different types of assets, including mutual funds, exchange-traded funds, private equity, stocks, bonds, commodities, etc. Some firms focus on one or two asset classes, while others have broad portfolios across different asset classes.

There are many asset management firms, but relatively few are in the big leagues managing over $100bn of assets. We want to examine the top ten asset managers in the world. They are:

1. BlackRock – $9.4 trillion of assets under management (AUM).
2. Vanguard – $7.2 trillion AUM.
3. Fidelity Management & Research – $3.9 trillion.
4. The Capital Group Cos. Inc. – $2.3 trillion.
5. Amundi – $2.1 trillion.
6. Pacific Investment Management Company (PIMCO) – $1.74 trillion.
7. Invesco – $1.57 trillion.
8. Wellington Management Company – $1.4 trillion.
9. Franklin Templeton Investments – $1.39 trillion.
10. T. Rowe Price Group Inc. – $1.35 trillion.

*Figures sourced from regulatory filings.

Let’s dive deeper into these firms below.

• BlackRock: An American multinational asset manager with clients across 100+ countries. It was spun out of Blackstone, a private equity firm, in 1994. BlackRock grew to become the world’s largest asset manager, and Blackstone became the world’s largest private equity firm by assets under management. BlackRock is led by Larry Fink, its prominent outspoken chief executive.

• Vanguard: The Vanguard Group is an American asset manager. It’s the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) globally (BlackRock is the first). Founder John Bogle created the first index fund available to retail investors and was a big advocate of low-cost investing, spurring a movement whose adherents call themselves “Bogleheads.”

• Fidelity Management & Research: Fidelity is a Boston, Massachusetts-based asset manager. It runs a brokerage firm and manages mutual funds, pensions, index funds, life insurance, etc. It was founded by the late Edward C. Johnson II in 1930. Edward’s granddaughter, Abigail Johnson, is Fidelity’s chief executive.

• The Capital Group Companies: Capital Group is a privately held asset manager owned by its partners. It focuses on active management, offering investment services globally to high-net-worth individuals and institutional clients. The firm is headquartered in Los Angeles, California.

• Amundi: A French asset manager and the largest in Europe. It was created in 2010 from a merger of the asset management divisions of Crédit Agricole and Société Générale, two French banking giants. Amundi is listed on the Euronext stock exchange.

• Pacific Investment Management Company (PIMCO): An American asset manager focused on active fixed-income management. It was founded in 1971 by Bill Gross, a combative billionaire known as the “bond king.” Gross was ousted from PIMCO and sued the company, claiming he was pushed out by a “cabal” of executives. PIMCO settled the lawsuit for $81mn. This book dives deep into the Gross-PIMCO saga: The Bond King: How One Man Made a Market, Built an Empire, and Lost It All.

• Invesco: Invesco was formed in 1978 when an Atlanta, Georgia-based bank divested its money management operations. Over time, it morphed into one of America’s biggest asset managers, with nearly $1.6 trillion of assets under management. Invesco trades on the New York Stock Exchange; it reported a $684mn net profit on $6.1bn in revenue in 2022.

• Wellington Management Company: A privately held asset management firm based in Boston, Massachusetts. It provides investment advisory services primarily to institutional investors. Jon Bogle, the founder of Vanguard Group, was Wellington’s Chairman before leaving to set up Vanguard.

• Franklin Templeton Investments: An American asset manager founded in 1947, named after Benjamin Franklin, an American founding father whose portrait graces the $100 bill. Franklin Templeton runs over 400 mutual funds, managing $1.38 trillion for clients. It trades on the New York Stock Exchange with the ticker “BEN,” a nod to Benjamin Franklin.

• T. Rowe Price Group: A Baltimore, Maryland asset manager whose shares trade on the Nasdaq stock exchange. It was founded in 1937 by Thomas Rowe Price Jr., a chemist who realized he was more interested in investing than scientific research. Price is fondly called “the father of growth investing” for his advocacy that investors could earn better returns by investing in well-run companies whose earnings were expected to outperform inflation.

Nine of the ten largest asset managers are based in the U.S., and one is based in Europe. Most of the top 100 asset managers globally hail from Europe and North America, with a few from Asia and none from other continents.

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