Many investors or organizations invest with the help of an asset management company. These firms take control of investments and make investment decisions.
An asset management company invests and manages portfolios of mutual funds and other securities. Some are geared toward very wealthy individuals. These investors usually hand over full control of their portfolios to managers, who handle their assets.
Here are some of the largest investment management firms in the world, plus what you need to know about how they work.
How Do Big Asset Management Firms Work?
Many asset managers will only deal with large institutions. These might be other corporations, big non-profits, or associations.
But many of the most recognizable firms will offer services for average investors. In many cases, asset management firms make money by charging fees based on the value of assets they manage. Others will charge flat fees.
These companies often have other business lines other than asset management. Sometimes, this includes brokerage services.
In some cases, asset management makes up only a fraction of the company’s revenue, and they often partner with each other in various ways, even though they are also competitors.
For example, one asset management firm may use its online platform to allow investors to buy and sell the mutual funds of a competing company.
10 Largest Investment Management Companies
Here’s a look at the top asset management companies. These rankings are based on the number of funds (assets under management or AUM) under their control, based on their most recently reported balance sheets.
You may recognize some of these companies: they are some of the largest financial institutions in the world.
Some companies may have much higher reported “assets under custody,” which would include money still managed by clients themselves.
AUM: $7.318 trillion
BlackRock is not just the world’s largest asset manager, but one of the world’s largest financial institutions. The company was founded in 1988 and went public in 1999.
The firm has been influential in advancing the growth of exchange-traded funds (ETFs) through its iShares products. iShares now comprise more than a quarter of BlackRock’s assets under management.
2. The Vanguard Group
AUM: $6.1 trillion
Vanguard is known for its strategy of passive investing. This means that money is placed in mutual funds designed to mirror the activity of a specific index or the broader stock market.
Vanguard boasts of low expense ratios for most of its funds. Along with asset management, Vanguard offers brokerage services, financial planning, annuities, and other services.
3. UBS Group
AUM: $3.518 trillion
UBS Group has four divisions that operate around the world. The Switzerland-based firm describes itself as the "only true global wealth manager."
UBS offers both wealth management and asset management services.
AUM: $3.319 trillion
Fidelity is an asset manager and a discount broker with more than 27 million customers. It offers an online platform for individual investors to buy and sell securities.
Fidelity also manages entire portfolios on behalf of clients. In the summer of 2018, it made headlines when it began offering mutual funds with a zero expense ratio and minimum investment requirement.
5. State Street Global Advisors
AUM: $3.054 trillion
Boston-based State Street is a subsidiary of State Street Corporation. It manages investments for a wide range of institutional clients, including non-profits, local governments, associations, and even educational groups.
AUM: $2.530 trillion
This German firm is primarily an insurer. It also operates two asset management divisions: Allianz Global Advisors and PIMCO. By itself, PIMCO has $1.92 trillion under management.
7. JPMorgan Chase
AUM: $2.511 trillion
Most people think of J.P. Morgan Chase as an investment bank, but it also has a robust asset management business. In 2017, it had $1.3 billion in assets moved from BlackRock as part of a new custody arrangement.
8. Goldman Sachs
AUM: $2.057 trillion
Asset management is just one of many services offered by Goldman Sachs. The types of clients it serves include:
- Hedge funds
- Banks and brokerages
- Endowments and foundations
Recently, Goldman Sachs has also branched out into sustainability and impact investment.
9. Bank of New York Mellon
AUM: $1.961 trillion
This company was founded around the same time that the United States first became a country. It was created by Alexander Hamilton.
More than 230 years later, BNY Mellon manages investments for individuals and investments in 35 countries.
AUM: $1.92 trillion
As mentioned earlier, PIMCO is managed under the same company as Allianz. Although it was acquired by a German company, it is headquartered in California.
It continues to operate as an independent subsidiary of Allianz.
Frequently Asked Questions (FAQs)
What do real estate investment companies do?
Real estate investment companies operate similarly to the other investment companies listed here, they just have a sole focus on real estate assets. In fact, the companies listed here offer some of the best real estate investment trusts (REITs) on the market today. These REITs essentially function as small real estate investment companies within the broader organization.
How are "high-net-worth individuals" determined by investment companies?
The definition is set by each investment company individually, but high-net-worth individuals are generally those with at least $1 million in liquid assets. High-net-worth individuals can significantly add to an investment company's total assets under management, so companies will seek out and fight to keep these clients.