Last year was not easy for the world's asset management industry, new figures show, although regions such as Asia delivered higher growth in assets.

The asset management industry stalled last year as the sector racked up the worst year for growth since the 2008 financial crisis, according to a report by Boston Consulting Group that shows a contrast with the performance of wealth management. However, data showed that in some regions, including Asia, performance was relatively positive.

BCG found that the global value of assets under management rose 1 per cent last year from a year earlier to $71.4 trillion, with growth decelerating sharply from the 8 per cent gain a year earlier. 

Such figures will sharpen the competitive battles firms are waging to remain profitable and ward off the threat from new technology-driven business models, the firm said.

In some ways, the figures for asset management are less positive than those for the global wealth management sector, as released a few weeks ago by BCG (see that report here).

The lack of overall growth in assets was due largely to the generally negative and turbulent performance of global financial markets, which failed to buoy the value of invested assets as in prior years, BCG said. Net new asset flows remained tepid. At the same time, the rising value of the US dollar reduced values of non-US assets in dollar terms.

“Weak and turbulent global financial markets are today’s reality—one recent example being the market response to Britain’s ‘Brexit’ vote to leave the EU,” said Brent Beardsley, BCG senior partner based in Chicago, global leader of the firm’s wealth and asset management segment and a co-author of the report. “Asset managers that depend on financial market performance to drive increases in asset values are stuck in a model from the past."

Overall profits remained relatively stable in 2015, but rose just 1 per cent to reach $100 billion. Profits as a percentage of revenues remained at 37 per cent, slightly below the 2014 level, because of increased cost management by asset managers. Meanwhile, fee pressure on managers continued to rise, the report said.

The industry’s regional growth, as measured by AuM, reflected in large part the performance of capital markets by region in 2015. AuM decreased in North America and the Middle East but rose elsewhere. Growth was modest in Europe and strong in Latin America and Asia, excluding Japan and Australia. The 10 per cent growth of AuM in Asia, excluding Japan and Australia, was relatively robust, but once again, it trailed the rapid expansion of the region’s private wealth. 

Net new flows of assets also varied widely by region. Flows were tepid in the US but more robust in much of Europe and Asia-Pacific, where they reached almost 2.5 per cent and 3 per cent of 2014 AuM, respectively. This performance marked a recovery of net flows in France, the Benelux countries, and Eastern Europe and continued positive momentum in Germany, Spain and Italy. In Asia-Pacific, China and India were among the markets where net flows exceeded 10 per cent of prior-year AuM.