Article: Q2 2021 Manager Reported Assets Gained in United States, Europe, and the United Kingdom

Scott Treacy | July 28, 2021

There has been a clear change in asset class focus by investors in the United States, Europe, and the United Kingdom based on the active manager hiring activity we have seen in the first half of 2021 compared to the first half of 2020.  Active public equity managers were preferred to active fixed income portfolio managers in 2021.  Overall, activity is down considerably in 2021, but this is most likely due to the repositioning of many portfolios in 2020 due to the COVID-19 pandemic.  Understandably, many investors positioned their portfolios more defensively (more fixed income) due to the rapid down turn in capital markets.  There are a few managers we will highlight as having a particularly successful year so far in 2021 based on the total assets gained they have reported to our Investment Metrics Global DatabaseIt is important to note that this analysis is based on preliminary numbers reported to our database as of 14 July 2021.

In the United States, active manager reported assets gained activity is down 29% in the first half of 2021 compared to the first half of 2020 with $81B in reported assets gained.  After a monstrous first half of 2020 for US fixed income with $65B in active manager hiring activity, the figure for the first half of 2021 was more typical at $33B.  This explains part of the drop off in activity.  US equity portfolios across the capitalization spectrum (All/Large/Mid/Smid/Small-Cap) and Global Large-Cap equity active managers have done very well so far in 2021.  Surprisingly, we have seen a decrease in activity by 34% for active Emerging Markets equity managers when comparing the two time periods.  This is unexpected given the known inefficiencies in emerging markets equities and active managers’ ability to outperform this market.  Overall, active public equity managers received approximately 57% of the total assets gained in the first half of 2021.  

Similar to what we saw from US investors, there was increased demand for active public equity managers in Europe and the United Kingdom in the first half of 2021 compared to the first half of 2020.  Active public equity managers took 45% of the overall hiring activity in the first half of 2021, this compares to 24% in the first half of 2020.  The areas of the public equity market that saw the largest increase were active Global Large-Cap equity managers and Emerging Markets equity managers.  Global fixed income managers also saw an increase in activity by 39%.

Below you can find the top asset gathers in the first half of 2021 based on data provided to our global database.  One of the big winners was WCM Investment Management, based out of Laguna Beach, California.  Their Focused International Growth portfolio had $3.4B in assets gained in the first half of this year in the United States, while their Quality Global Growth portfolio had $733M in assets gained from the European market.  Schroders Investment Management is another firm that did well in the European and United Kingdom markets.  Their Global Emerging Markets Smaller Companies portfolio took in $432M from European investors.  In the United Kingdom their quantitative offering, QEP Global Value, had $487M in assets gained and their Global Corporate Bond strategy gained $345M in assets.  Finally, AQR’s risk parity portfolio (Global Risk Premium) increased by $1.5B from United Kingdom investors. 

In closing, it will be interesting to see how hiring activity will change in the second half of 2021.  The mood seems to be much more defensive, so we may see increased fixed income hiring activity.  However, there is no doubt that active public equity managers were in high demand in the first half of 2021 based on where United States, European, and United Kingdom investors placed their assets.

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