PriceWaterhouseCooper puts confidence in investment management industry

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Accounting and finance powerhouse PwC is convinced the asset management sector posesses a bright future. They project a compound annual expansion rate of 6 % for the industry over the next 5 years, with international investable resources for the asset management sector increasing to over $100 trillion by 2020.

PwC's latest report Asset Management 2020: A Brave New World also emphasizes that asset managers must create beneficial social impact and give the open message that they are a force of reliability, to policymakers and investors for success.

Last year, foreign investments under supervision reached around $63.9 trillion. Based on a comprehensive analysis of historical information, PwC expects this should rise to $101.7 trillion by 2020, which symbolizes a combined development rate of just under 6 %. When forecasting assets under management growth, PriceWaterhouseCooper assessed correlations between AuM and a number of fiscal factors during the previous 13 years.

PriceWaterhouseCooper forecasts that much of the expansion in the international asset management sector over the next few years will come from Africa, South America, Asia and the Middle East. The review says that investments under management in the African, South American, Asian and Middle Eastern markets is anticipated to improve more rapidly compared to the developed economies between 2014 and 2020.

Nevertheless, the majority of investments will be centered in the USA and Europe in 2020. Significant competitors in the resource management sector in the Western world comprise US companies Fidelity Investments, Blackrock and J.P. Morgan Asset Management, and British corporations Lazard Asset Management, Troy Asset Management and Royal London Asset Management.

Of note, Japan's resources under supervision within the MSCI World Index was only 9 % as of 2010, while their total contribution to GDP was close to 18 percent at the time. As per PwC, Japan's contribution to GDP is probable to top 25 % by 2020.

Another substantial factor of growth in international investments under management is the ongoing growth of employer specific contribution plans, often driven by government-incentivized or mandated transitions to personal pension schemes.

The PriceWaterhouseCooper article highlights that it's possible that foundations and endowments of any size may also continue to expand AuM as the baby boomer generation bequeaths more of their riches. The big bulk of these endowments and foundations will, of course, perform with international investment brokers to make the best attainable return on their funds.