THE INTERNATIONAL NEWSPAPER OF MONEY MANAGEMENT | JUNE 10, 2024 | PIONLINE.COM | $50 AN ISSUE / $350 A YEAR
The Largest Money Managers
Managers claw back half of ’22 losses Money managers in 2023 recovered just over half of the $9 trillion in institutional assets they lost the year before, even as lingering economic and political uncertainties kept a lot of money sidelined, including a record $6 trillion parked in money market funds alone. When that money comes off the sidelines, managers of active fixedincome and alternatives strategies will likely continue picking up market share at the expense of equity managers, analysts said. Pensions & Investments’ 2023 survey of the largest money managers showed institutional assets for 411 managers around the globe rising 9.7%, or $4.89 trillion, to $55.23 trillion as of Dec. 31 — roughly half the prior year’s $9.32 trillion plunge. Total worldwide assets for those managers rose 11.2%, or $8.7 trillion, from the year before to $86.18 trillion. Despite a start to the year dominated by recession fears and some notable bank failures, managers — still smarting from the U.S. rate hiking cycle that pummeled stock and bond markets alike in 2022 — mostly saw a proverbial glass that was half full rather than half empty as 2023 drew to a close. Optimism was in short supply
Inside this issue ■ Managers seeing big potential in AI Page 3 ■ Corporate plans favoring larger managers Page 3 ■ Franklin Templeton’s Johnson sees changes ahead Page 3 ■ Graphic: Largest managers getting even bigger Page 3 ■ AI is making cybersecurity more difficult Page 13 ■ Mercer is looking to grow its OCIO business Page 13 ■ Traditional active ETFs set to grab assets Page 14 ■ Investors are hungry for better ESG data Page 14 ■ Eduardo Repetto is leading Avantis’ ETF charge Page 45 ■ Data and graphics begin on Page 12 ■ For the full report, go to
PIonline.com/managers2024 as the year began, but then chipmaker Nvidia announced impressive results in May and SEE MANAGERS ON PAGE 52
The Largest Money Managers Real Estate
Higher-for-longer interest rates showed no mercy for real estate By Arleen Jacobius Higher-for-longer interest rates swamped all property types, causing most real estate managers’ assets under management to sink in 2023, the results of Pensions & Investments’latest money manager survey shows.The close to 18-months-long higher interest rate environment is making last
“There is downward year’s rallying cry of “Sur- The data pressure on AUM because vive ‘til ‘25” in need of a rereal estate property values write to something more Data on real estate have dropped,” said Colin akin to “Don’t deep-six be- managers begins Hill, managing principal, fore ‘26.”Real estate equity on Page 38. real estate consultant at AUM managed for U.S. tax-exempt institutions dipped 1.9% to Meketa Investment Group. The reason: $509.7 billion between 2023 and 2022 there’s been a significant change in the and is up only 10.8% over the past five risk-free rate, he said.” Now that the years, P&I data shows. SEE REAL ESTATE ON PAGE 54 dane_mark/Getty
By Douglas Appell
Daniel Pelavin
Markets shake off recession fears, bank failures, pushing AUM to $55.23 trillion
ESG
ESG’s branding woes pushing investors, managers to adapt By ARLEEN JACOBIUS ESG is in the midst of a makeover. In some U.S. states, the three letters standing for environmental, social and governance have become toxic, even though institutional investors and pension fund executives continue to incorporate ESG into their investment process, believing that managing risk on matters such as climate change and associated floodwaters, for exam-
ple, is essential to protecting their investments. In Europe, ESG doesn’t appear to be as politicized, but it has become a red state-blue state flashpoint in many parts of America. Some states in the U.S., including Florida, Missouri, North Carolina, Oklahoma and Texas, have barred consideration of ESG factors A new law in Oklahoma, for example, requires public pension
Pension Funds
Legal battle finally over, Illinois Firefighters turns focus to private markets By ROB KOZLOWSKI William Atwood, executive director and chief investment officer of the $8.4 billion Illinois Firefighters’ Pension Investment Fund, Lombard, is building out a private markets portfolio, now that a long-simmering lawsuit is over. The pension investment fund was created by a December 2019 law that consolidated municipal police and fire pension plans outside the city of Chicago into the Illinois Police Officers’ Pension Investment Fund, Peoria, and IFPIF. A Kane County lawsuit, filed in February 2021 by the boards of 16 Illinois municipal police pension funds and two firefighters pension funds, alleged that the law violated Illinois Constitution clauses by terminating "plaintiffs' authority to exclusively | SEE FIREFIGHTERS ON PAGE 49
SEE BRANDING ON PAGE 49
SOUND BITE FRANKLIN TEMPLETON’S JENNY JOHNSON: ‘If you
ask me what I think the most disruptive trend is going to be, it’s tokenization. It’s blockchain.’ Page 3
PE deals heating up amid Japan’s gains Japan’s corporate governance reforms, weak yen and stock market gains are bringing in private equity buyers and spurring deals. Page 2