Global assets under management by firms in the asset management industry grew by 12% in 2024 to reach $128 trillion, according to the Boston Consulting Group’s 2025 global asset management report, “From Recovery to Reinvention.”
Market performance was a key driver of growth in 2024, contributing to 70% of the industry $58 billion in revenue growth. Net inflows accounted for 30% of global revenues, as managers shifted to offering lower-priced products and were affected by fee compression.
Investors also continued to shift away from actively managed funds to passive ones. In 2024, active strategies experienced $100 billion in outflows, while passive funds had $1.6 trillion in inflows.
One of the forces reshaping the industry, BCG noted, is the consolidation of firms, as an increasing number of asset managers are turning to mergers and acquisitions to expand their geographical footprints and product offerings.
The last few years has produced many high-profile acquisitions, such as BlackRock’s expansion into alternative investments with its 2024 acquisitions of private credit manager HPS Investment Partners ($148 billion AUM) and infrastructure investor Global Infrastructure Partners ($170 billion AUM).
According to BCG, for firms with fewer than $300 billion in AUM, adding AUM reduces costs as a percentage of AUM. At the $500 billion mark, rising operational challenges and complexity emerge as these firms expand to new asset classes and client segments.
“Because no one-size-fits-all approach is available, many asset managers will need to consider enhancing their scale and scope through strategic partnerships or M&A to stay relevant,” the report stated. “The consolidation we are seeing tends to revolve around strategies for broadening product offerings, expanding global presence, building technology capabilities, securing more permanent capital, and increasing proximity to clients.”
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Tags: Asset Management, BCG, Boston Consulting Group, Research