Assets managed by world's biggest 500 firms increased to $128 trillion at the end of last year, new data shows.
The research from the Thinking Ahead Institute shows annual growth of 12.5%, despite not reaching 2021 levels.
For the first time, passive investment strategies now account for more than one third of AUM among the 500 largest firms, though this still leaves almost two thirds of assets managed by the world’s largest managers in active strategies.
The findings show that asset class allocations have also evolved, with renewed growth of private markets.
Core equity and fixed income remain the dominant asset classes, comprising 77.3% of total AUM.
However, this marks a slight decrease of 0.2% compared to the previous year, as investors turned to alternatives such as private equity and other illiquids in search of returns.
North America experienced the largest growth in AUM with a 15% increase, followed closely by Europe and UK with a 12.4% rise.
At the very top of the rankings, US managers make up 14 of the top 20, and account for 80.3% of the assets of the top 20.
The research shows that BlackRock remains the world’s largest asset manager, with its assets now above $10 trillion once more.
Vanguard Group holds a strong second place at almost $8.6 trillion AUM and both remain significantly ahead of Fidelity Investments and State Street Global - ranked third and fourth respectively.
"While there has been a return to strong market performance, the last year has also seen forces of change," said Jessica Gao, Director at the Thinking Ahead Institute.
"Macro factors have played a key part in the story, with notable highs in interest rates during 2023 exerting varied pressure on different asset classes, geographies and investment styles.
"As this now gradually switches to a rate cutting environment, equity markets are beginning to return positive performance also driven by improving expectations of earnings growth," said Ms Gao.
She said uncertainties looking ahead are now focused on geopolitical events and several major elections.
