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World’s Five Largest Asset Management Companies Hold $22.5trn in Assets, More than US GDP

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Global Five Biggest Asset Management Companies Hold $22.5trn in Assets, More than US GDP

Institutions and individuals who invest money usually do so with the asset manager’s help, a company that manages their investments and makes a profit for both sides. These firms make well-timed investment decisions on behalf of their clients to grow their portfolio and finances.

According to data presented by Stock Apps, the world’s five largest asset management companies hold $22.5trn in assets, more than the GDP of the United States. With more than $7.3trn in assets under management or one-third of that value, BlackRock represents the leading asset manager globally.

Total Assets Under Management of BlackRock Surged 57% in Five Years

Asset management companies work with several investors, which enables them to reduce the risk, diversify their clients’ portfolios, and provide access to higher-value options with better capital appreciation prospects. In many cases, they make money by charging fees based on the number of assets they manage, although some companies charge flat fees. These firms usually also provide other services than asset management, which generates only a part of their revenue.

The world’s largest asset manager, BlackRock, has become one of the leading players on the financial market over the last 25 years. It serves individual investors, companies, governments, and foundations through 70 offices all around the world. BlackRock also tops the list of largest Exchange Traded Fund (ETF) providers in the United States and has played a huge role in advising the US government during the financial crisis.

In 2015, the total value of assets under BlackRock’s management amounted to $4.6trn, revealed the company’s annual report. During the last five years, this figure surged by 57% to $7.3trn in 2020. Besides leading in the value of managed assets, the New York-based financial giant also witnessed a steady market cap growth in 2020. In September, the total value of BlackRock stocks hit $83.6bn, a 22% jump year-over-year.

With $5.7trn in total assets under management, the Vanguard Group ranked as the second-largest asset manager globally. The US financial company, with 20 locations worldwide and 17,600 employees, is also the second-largest provider of exchange traded funds and the largest provider of mutual funds in the world.

Eight of the top 10 Asset Management Firms are US Companies

UBS Group represents the third-largest asset manager globally, with more than $3.5trn in assets under management. The Swiss financial corporation and the country’s largest bank announced a net profit of $1.23 billion for the second quarter of 2020, an 11% drop year-over-year mostly caused by the continued credit losses amid the coronavirus crisis.

However, higher trading activity continued to support the bank’s earnings between March and June. The Group’s quarterly earnings also revealed an operating income of $7.4bn, compared to $7.5bn a year ago. Statistics show the Swiss lender lost $1.6bn in market capitalization in 2020, with the total value of stocks falling from $45.6bn in December 2019 to over $44bn this month.

State Street Global Advisors and Fidelity Investments ranked as the fourth and fifth largest asset managers globally, with $3.05trn and $2.92trn in total assets under management.

Analyzed by geography, the US asset managers lead on the global list of the most successful companies, with eight of the top 10 asset management firms from the United States. Statistics also show the world’s largest banks like JP Morgan Chase, Goldman Sachs, and Bank of America were not among the top five asset managers in terms of managed assets.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Young or Old: Put a Plan in Place for Your Loved Ones Today – FBNQuest

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FBNquest - Investors King

In our fast-paced world, the average person is consumed with how to improve and sustain their quality of life. Little attention is paid to what happens when they become incapacitated or pass away. For some people, the thought about  putting structures in place only takes place at the tail end of their adult life.

If this sounds a lot like you, consider putting a plan in place as soon as possible. The two primary ways to make the transmission of your assets seamless is through a written Will or the use of a Trust. A Will is a legal document that captures your wishes and the distribution of your assets. It clearly outlines who should take on the responsibility of managing your assets until they are distributed. With a Trust, a Trustee is appointed in your life time to hold and manage your assets on your behalf for your beneficiaries.

When a Will or Trust is not in place prior to your demise, a lot of paperwork is often needed to fix the process of transfer to a beneficiary. This will obviously impact traditional assets such as bank deposits, retirement savings with a pension fund administrator, stock holdings, real estate and other physical or financial assets. The process of transferring these assets could take months and even years simply because the person did not have a Will or Trust in place.

Applicable taxes on assets not stated in a Will may also lead to a reduction in the value of the original asset being transferred to a beneficiary. In addition, the rise in the use of digital platforms means that if you fail to create and keep such records with a Corporate Trustee for safe keeping, online accounts and passwords that are not recorded securely could become inaccessible after your demise. It is therefore possible that some assets that you own may be lost forever.

FBNQuest offers you the opportunity to put your house in order and make life easier for your beneficiaries. We are happy to advise you on how to draft a Will and put you in touch with realities that can make the process seamless and efficient. We also assist with structuring your Trust arrangements with the use of the Trust Deed in line with your wishes.

Single, married, young or old –  You probably have assets that you would like to pass on to people or organizations that mean a lot to you. It takes careful planning to ensure that your intention to gift these assets are properly executed.

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Qatar Investment Authority (QIA) Plans to Invest $200 Million in Airtel Africa’s Mobile Money Business

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Airtel Africa Plc - Investors King

Airtel Africa has signed an agreement with under which Qatar Holding LLC, an affiliate of the Qatar Investment Authority (QIA), plans to invest $200 million in Airtel Mobile Commerce BV (“AMC BV”), a subsidiary of Airtel Africa plc (the “Transaction”).

The Transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt free basis. QIA will hold a minority stake in AMC BV upon completion of the Transaction (alongside other minority investors), with Airtel Africa continuing to hold the majority stake. The Transaction is subject to customary closing conditions.

Following the announcement on 18 March 2021 of a $200m investment in AMC BV by TPG’s The Rise Fund, on 1 April 2021 of a $100m investment in AMC BV by MasterCard and the sale of the Group’s telecommunication towers companies in Madagascar and Malawi on 23 March 2021, the Transaction is a continuation of the Group’s pursuit of strategic asset monetization and investment opportunities, and it is the aim of Airtel Africa to explore the potential listing of the mobile money business within four years.

The proceeds from the Transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.

Airtel Africa mobile money services

Operating under the Airtel Money brand, Airtel Africa’s mobile money services is a leading digital mobile financial services platform catering to a large addressable market in Africa (characterised by limited access to formal financial institutions with limited banking infrastructure) and includes mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual card and international money transfers.

Mobile money services are available across the Group’s 14 countries of operation, however in Nigeria the Group offers Airtel Money services through a partnership with a local bank and has applied for its own mobile banking licence. It is the intention that all mobile money operations will be owned and operated by AMC BV.

In our most recent reported results for Q1’22, the mobile money services (corresponding to all the businesses that are intended to be transferred to AMC BV) delivered a strong operational
performance:

 Generated revenue of $124m ($496m annualised), and underlying EBITDA of $60m ($240m annualised) at a margin of 48.8%.
 Year on year revenue growth for the quarter was 53.7% in constant currency, largely driven by 24.6% growth in the customer base to 23.1 million, and 25.4% ARPU growth.
 Growth in transaction value was 64.4% (constant currency) to $14.7bn ($59bn annualised).

Our mobile money business benefits from strong network presence with our core telecom business through the extensive distribution platform of kiosks and mini shops as well as dedicated Airtel Money
branches supplementing our extensive agent network, to facilitate customers’ access to assured wallet and cash.

We have a clear strategy to continue to drive sustainable long-term growth in Airtel Money with a focus on assured float availability, distribution expansion and increased usage cases for our customers.

Last year we added partnerships with Mastercard, Samsung, Asante, Standard Chartered Bank, MoneyGram, Mukuru and WorldRemit to expand both the range and depth of the Airtel Money offerings and to further drive customer growth and penetration.

The profits before tax in the full year ending 31 March 2021 and the value of gross assets as of that date, attributable to the mobile money businesses were $185m and $668m, respectively.

Key elements of the Transaction

 Agreement values Airtel Africa’s mobile money business at $2.65bn on a cash and debt free basis.

 AMC BV, a subsidiary of Airtel Africa, is the holding company for several of Airtel Africa’s mobile money operations; and it is intended that ultimately it shall own and operate the mobile
money businesses across all of Airtel Africa’s fourteen operating countries once the inclusion of the remaining mobile money operations under AMC BV perimeter is completed.

 QIA will invest $200m through a secondary purchase of shares in AMC BV from Airtel Africa. The transaction will close in two stages: $150m will be invested at first close, subject to customary closing conditions, including necessary regulatory filings, with $50m to be invested at second close once further transfers of certain mobile money operations and contracts into the AMC BV perimeter have been completed.

The Transaction first close is expected in August. From first close, QIA will be entitled to appoint a director to the board of AMC BV and to certain customary information and minority protection rights.

Comment on the deal, Raghunath Mandava, CEO of Airtel Africa, said “With today’s announcement we are pleased to welcome QIA as a prospective investor in our mobile money business, joining both Mastercard and TPG’s The Rise Fund as a further partner to help us realise the full potential from the substantial opportunity to bank the unbanked across Africa.”

Mansoor bin Ebrahim Al-Mahmoud, CEO of QIA, added that “We are delighted to build on our support of Airtel Africa in promoting financial inclusion to the large and growing population of Sub-Saharan Africa. Airtel Money plays a critical role in facilitating economic activity, including for customers without access to traditional financial services. We firmly believe in its mission to expand these efforts over the coming years.”

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West and Central Africa’s Investment Environment and Infrastructure Opportunities in Spotlight

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Paris - Investors King

A new focus report produced by Oxford Business Group (OBG), in partnership with the international brokerage network Groupe Ascoma, will explore the increased focus on compliance, transparency and ethical practices in the West and Central African markets as the region looks to attract investment for its economic development.

Titled “Governance, Risk and Compliance in West and Central Africa”, the focus report will provide in-depth analysis of key issues relating to insurance and reinsurance, against the broader regional socio-economic landscape, in an easy-to-navigate and accessible format, featuring essential data and infographics.

The report will shine a spotlight on the way that doing business is evolving across the region’s economies at a time when ECOWAS members are keen to source funding for a vast range of intra-continental and domestic infrastructure projects.

Subscribers will find detailed coverage of the key role that private sector players such as Ascoma are expected to play in driving change and instilling a culture of insurance and reinsurance across business communities by identifying risks common to the region and providing effective, tailored solutions to them.

The report will examine specific areas of the economy in which governance, risk and compliance (GRC) principles are being given added weight, including energy, infrastructure, mining and the financial services industry.

It will also include an in-depth interview with Farid Chedid, CEO and Chairman, Groupe Ascoma, in which he explains how GRC dynamics are helping the company achieve its objectives, while supporting the region’s bid to make future economic growth sustainable. “Ascoma is committed to the economic and infrastructure development of Africa, and applying Global, Risk and Compliance principles is essential for our operations, not only in the continent but also in the Middle East and the rest of the world. Transparency, compliance, and business ethics are top priorities for us in the moment of investing in any country”. Commenting ahead of the signing of a Memorandum of Understanding for the report, Bernardo Bruzzone, OBG’s Regional Editor for Africa, said that the new report with Ascoma was timely, given the added importance that both corporations and governments are attaching to GRC principles.

“Business environments are changing globally on the back of new requirements from investors, with tighter regulations and greater transparency,” Bruzzone said. “Our research with Ascoma will plot the GRC trends that are gaining momentum regionally, while also highlighting the positive impact they could have on West and Central Africa’s potential as an investment destination.”

“Governance Risk and Compliance in West and Central Africa” will form part of a series of tailored reports which OBG is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific Growth and Recovery Outlook articles and interviews.

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