Asset Management: the 12 months that was | Invesloan.com

One thing to start: Welcome to your special year-end edition of FT Asset Management. We’ve pulled out five themes that dominated in 2024. What have we missed? And where should we focus our coverage next year? Email me: harriet.agnew@ft.com 

BlackRock’s shopping spree

BlackRock chief executive Larry Fink said in 2023 that he was on the hunt for “transformational” acquisitions. This year, the world’s largest money manager came through in spades, striking three deals aimed at boosting the company in alternative assets.

First up was a $12.5bn agreement to buy Global Infrastructure Partners in January, which vaulted BlackRock to second in the league tables for private infrastructure managers and brought on board entrepreneur Adebayo Ogunlesi and four of his partners. The deal also helped set the stage for BlackRock and Microsoft to combine forces on a $30bn fund to invest in artificial intelligence infrastructure.

Over the summer, BlackRock agreed to buy UK private markets data provider Preqin for £2.5bn. The data will be integrated into BlackRock’s Aladdin technology platform and could eventually be used to create index funds for private markets.

Most recently, BlackRock agreed to take over private credit manager HPS for more than $12bn paid out over five years. Following completion it will more than double BlackRock’s alternative assets to nearly $600bn.

Fink’s acquisition spree may not be over — we revealed last month that BlackRock is exploring a tie-up with Millennium Management that could see it take a minority stake in the multi-strategy hedge fund manager. — Brooke Masters

The march of the Americans

This year, Shell asked BlackRock to manage €26bn of its pension assets. It followed British Airways’s appointment of BlackRock in 2021 to look after £21.5bn of pension assets, and a £23bn mandate that defence contractor BAE Systems awarded to Goldman Sachs. 

The recent US domination of so-called outsourced chief investment officer (OCIO) services is a particularly visible sign of a much broader shift in global money management. Very large US groups are building an ever larger presence in the UK and Europe — gathering assets, squeezing fees and shaking up the market.

The Americans are profiting as European investors shift money into low-cost tracking funds, exchange traded funds and unlisted alternatives. Buoyed by rising fee income from vibrant US securities markets, they can spread technology and compliance costs across a larger asset base. The pending return of Donald Trump to the White House, along with Republican control of Congress and a conservative-leaning Supreme Court, is propelling US momentum further.

By contrast, the UK’s listed asset managers are stumbling. This year Schroders and Abrdn have both appointed new bosses to try to boost flagging share prices and cut costs. In continental Europe, asset managers are increasingly trying to pull off big mergers to gain scale in the face of the Americans. — Harriet Agnew

The Middle Eastern gold rush 

Just as bank robber Willie Sutton said he targeted lenders “because that’s where the money is”, this year some of the world’s most prominent money managers, including BlackRock, PGIM and Marshall Wace fell over themselves to open new offices and otherwise expand in the Middle East. They are looking for ways to endear themselves to Gulf sovereign wealth funds and wealthy investors in the region. 

The gold rush there is a testament partly to the fact that many western investors have been holding back on new commitments because high interest rates have made it rewarding to stay on the sidelines, and those who have money tied up in private equity funds are still awaiting its return. The investment in Middle Eastern offices also reflects a change in attitude from investors there. Gulf sovereign wealth funds are no longer content to hand over their petrodollars to global fund managers. They want growth at home. So they are insisting on local offices and local investment as part and parcel of any agreement.

“The Saudis are sick to the teeth of being treated just as a cash cow, and they are extremely suspicious of fee chasers,” said one London-based banker. “They want people to put skin in the game.” — BM

Rebooting Britain’s capital markets

The existential crisis facing UK investors continued this year, despite efforts by the government, regulators and the London Stock Exchange Group to boost the City’s attractiveness by reforming market rules and the domestic pensions system.

This is not a uniquely British problem, of course. Nonetheless, the LSE is on course for its worst year for departures since the financial crisis and the number of new listings is also set to be the lowest in 15 years as initial public offerings remain scarce and bidders target London-listed groups. 

In October’s Budget, new Labour chancellor Rachel Reeves proposed a major overhaul of the pensions industry as the government hopes to drive investment into productive British assets through a series of Canadian-style “megafunds”. 

This would involve rapid consolidation across UK defined contribution workplace pensions — forecast to manage £800bn by 2030 — and local government pension schemes in England and Wales, which are on track to reach £500bn in size by the end of the decade. 

By forcing schemes to merge into funds with at least £25bn in assets, the government estimates it can unlock up to £80bn to invest in assets with higher returns — such as private equity and infrastructure — and deliver better performance for savers. — HA

The year in markets

Investors ran into 2024 expecting the impossible: an aggressive run of interest rate cuts from the Federal Reserve (ie: recession), and further strength in stocks (ie: the opposite). In the end, markets were wrong on rates — the Fed waited until September to start cutting, albeit with a half-point bang — and right on stocks, which ground on, and on, and on. 

Talk of a bubble is now kicking around again, with some fund managers wondering whether the miraculous run in US stocks (led by the giant tech companies) can continue. Yes, a lot of the gains are from multiple expansion, but it’s not obvious that stocks are running wildly ahead of earnings. 

The three big themes for 2025 are Trump, Trump and Trump. US stocks have soared on the prospect of deregulation, tax cuts and a boom in dealmaking. His election win also fuelled a powerful rally that propelled bitcoin above the $100,000 milestone. 

American exceptionalism is a huge consensus. Investors may be too cautious on Europe, especially if Ukraine moves towards peace. Trump will dominate that conversation, and his mercurial style and pugnacious tariff policy (notably towards China) point to some alarming moments (but also great opportunities) in the year ahead. — Katie Martin

10 of our best scoops

10 of our best longer reads

10 of our top news interviews

We had lunch with . . . 

And said goodbye to . . . 

And finally

The wild tale of Lars Windhorst and H2O Asset Management shows that truth is indeed stranger than fiction. And now it comes to your screens in this unmissable FT Film. Featuring scandal, spies and a superyacht, it tells the story of how a racy financier with nine lives became tangled up with a star of French finance. Featuring none other than Windhorst himself, who gives his own account of some of his biggest scandals.

Well that’s all, folks. Thanks for reading, and from me and all of the team, we wish you a happy, healthy and prosperous 2025.