Assets under management at the 500 largest advisors in the world rose 16% in 2009 to $62 trillion, after contracting 23% the year before, according to Towers Watson and Pensions & Investments.

This was the second-highest gain in assets in one year since the two organizations started the ranking in 2996. However, assets are still below 2006 levels, and half of these managers have been growing assets through acquisitions over the past five years, as opposed to via organic growth.

Stock markets also remain fragile and volatile, reflecting “the weak underlying economic fundamentals and the oscillating risk appetites among institutional investors,” noted Carl Hess, global head of investment at Towers Watson.

The report also found that the top 20 managers’ market share grew from 38% to 40%, but that bank-owned companies dominate their ranks. Among the top 20, 12 are U.S.-based investment managers, in control of 63% of the assets, up from 51%. The other eight managers are European-based.

“The larger firms were again the main beneficiaries of the rebound and increased their share of total assets to the highest levels since the research began,” Hess said. Most asset managers are now poised to return to profitability, helped by market returns, net inflows, performance fees and reduced overheads.

Over the past 10 years, asset managers in developing countries have doubled their share of assets to 4%. Japanese asset managers’ AUM, meanwhile, have fallen to 7%, down from 13%.