- BCG Report Finds That Global Assets Under Management (AuM) Reached a Record $128 Trillion in 2024, up 12% from the Previous Year
- Market Performance Drove 70% of Asset Managers' Revenue Growth in 2024, Underscoring the Industry's Vulnerability to External Conditions and the Urgent Need for It to Transform to Remain Competitive, Especially in the Context of Market Performance So Far in 2025
BOSTON, April 29, 2025 -- The global asset management industry grew to a record-breaking $128 trillion in assets under management (AuM) in 2024, a 12% increase from the previous year, according to Global Asset Management 2025, the 23rd edition of this report from Boston Consulting Group (BCG). The industry's performance marks a rebound from the decline it suffered in 2022, but the recovery belies mounting structural pressures that demand urgent reinvention.
This year's report, titled From Recovery to Reinvention, reveals that more than 70% of the industry's $58 billion in revenue growth in 2024 was driven by market performance rather than investor inflows, underscoring the industry's vulnerability to external forces. Meanwhile, persistent fee compression, shifts in investor preferences, and digital disruption are pushing firms to redesign their business models, accelerate cost innovation, and sharpen their strategic focus.
"The winners of the next decade will not be those who simply weather the storm, but those who redefine their future direction," said Dean Frankle, BCG managing director and partner and a co-author of the report. "Recent market volatility could serve as a catalyst for change, and asset managers will need to shift from recovery mode to innovation mode—rethinking how they deliver value, engage clients, and run their businesses."
The report highlights three forces reshaping the industry:
1. Opportunities to Create New Products in Response to Changing Investor Demands
Looking forward, asset managers have two opportunities to win in an evolving product and distribution landscape. First, they can claim a larger portion of a shrinking but important pool of actively managed assets—specifically, in active exchange-traded funds (ETFs), model portfolios, and separately managed accounts. Second, they can mobilize to play a key role in the growing market for delivering private assets to retail clients.
- Active ETFs are entering a high-growth phase. In 2024, 44% of all newly launched ETFs were actively managed, and the category has grown at a compound annual growth rate (CAGR) of 39% over the past decade. Although still a small slice (6.5%) of ETF AuM, active ETFs offer compelling value for investors—charging just 0.64% in fees on average compared to 1.08% for mutual funds.
- Retail access to private markets represents a major frontier. Semi-liquid private asset funds have grown more than fivefold in the past four years and now exceed $300 billion in net asset value. This expansion is being driven by rising demand for higher risk-adjusted returns and long-term performance. But distribution to retail clients requires overcoming regulatory hurdles, addressing product design complexity, and expanding investor education.
2. A Critical Need for Consolidation and Digital Transformation
Strategic partnerships and M&A are reshaping the landscape as firms race to gain scale, broaden offerings, and build technology capabilities. In a study of 270 asset managers, BCG found that the average asset manager doubled its AuM from 2013 to 2023. Those overseeing the largest amount of assets can drive costs down through technological synergies, streamlined operations, and process efficiencies, while those managing less than $300 billion must emphasize leaner models.
3. A Renewed Focus on Cost
As asset managers emphasize operational efficiency, enhanced decision making, and client engagement, AI has emerged as a key accelerator. GenAI is transforming process automation and product delivery—especially in complex areas such as illiquid and alternative assets—and is now being deployed across the front, middle, and back offices.
"Cost discipline is now strategic," said Renaud Fages, a managing director and partner at BCG and a co-author of the report. "Winning firms are asking tough questions about where they can create unique value and where they must be radically lean. They will also double down on strategic technology initiatives that have transformative potential."
Download the publication here:
https://www.bcg.com/publications/2025/reinventing-growth-amid-market-volatility
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