Macquarie Group has emerged as the fastest growing among the top 500 global asset managers over five years, breaking into the top 50 list of the world's biggest funds, according to asset consultants Towers Watson.
The Sydney headquartered financial services firm's transition from investment bank to asset manager has seen it grow assets under management by more than 250 per cent since 2010, when measured in Australian dollar terms, and 200 per cent in US dollar terms, according to the annual survey of the top 500 fund managers.
Macquarie jumped 66 places over five years to break the top 50, with $US370 billion ($518 billion) of funds under management. Commonwealth Bank, which owns Colonial First State, is the 100th largest fund manager in the world according to the survey, with $US156 billion at the end of 2014. 
The growth in Macquarie's assets is a further demonstration of its transition away from investment banking style earnings, which accounted for about 60 per cent of the group's earnings, to less than 25 per cent today.
While Australian assets under management have experienced strong growth, our share of total funds is modest compared to other countries. The United States continues to dominate global asset management, accounting for more than half of all global funds. Switzerland, the UK and Japan have all experienced declines.
Australia, meanwhile, has experienced modest growth: the top 20 largest funds now account for US$1 trillion of assets under management, according to the report.
Towers Watson senior investment consultant Dania Zinurova said the growth in Australian assets under management reflected growing interest from foreign investors to gain exposure to real estate, infrastructure and natural resources offered by local funds.
She also noted a growing trend of large asset owners, such as pension funds, investing directly in private equity, real estate and infrastructure. This "cost efficient implementation" was more evident in Australia than in other parts of the world because of fee pressures facing local pension funds.
Five of Australia's top 20 fund managers in the survey are Real Estate Investment Trusts, while several, including Macquarie, QIC and RARE, are large infrastructure investors.
In fact, the report showed that while Australian fund manager assets are growing "Australian assets are going more actively offshore than before", said Ms Zinurova
The report showed that the largest asset managers that focus on passive strategies, such as BlackRock and Vanguard, continued to accumulate assets while smaller specialist independent investment firms were also able to grow assets at the expense of bank owned funds and insurers.

Passive investment strategies
More investors are gravitating towards passive investment strategies amid a focus on costs, as active managers persistently struggle to outperform their benchmark returns.
"Over time as assets under management grow, investors question active strategies and whether they do add value net of fees," said Ms Zinurova.
Passive funds under management had grown by almost 13 per cent per annum over 10 years, compared to just under 5 per cent growth of the top 500 funds, Towers Watson said. At present $US5.5 trillion is managed in passive strategies, more than double the $US2.5 figure in 2010. Active funds have also grown strongly from $US10 trillion to $US 19 trillion.
With over $US4.5 trillion of assets under management, BlackRock is the world's largest asset manager, followed by Vanguard with $3.15 trillion and StateStreet
All three fund managers have benefited from the rise of exchange traded funds, which allow investors to track major equity and fixed income indices via investments in stock market listed securities.
In addition to Macquarie, Japan's Sumitomo Mitsui was the second fastest growing fund manager, followed by Affiliated Management Group, a listed group that owns stakes in several high performing asset managers, like activist ValueAct and quantitative hedge fund AQR. Dimensional Fund Advisors, the pioneers of smart beta strategies that combine active and passive styles of investing, was also among the top five fastest growing fund managers over five years.
Ms Zinurova said the survey showed an increasing number of independent asset managers in the top 500 funds.
"This might reflect that investors have stronger preference for well-aligned businesses and that have equity and co-investment. Smaller businesses tend to have better alignment compared to large bank-owned asset managers," she said.