Total assets managed by alternative investment managers globally has hit $6.2 trillion. The 100 largest players account for nearly 60% of the market, holding a combined $3.6 trillion in assets. Of this group, real estate managers continue to have the largest share at their disposal: 34%, around $1.2 trillion. Australia-based Macquarie Group and US-based Blackstone (2x), Bridgewater Associates and CBRE Global Investors can call themselves the most important asset managers of the globe.
New research by Willis Towers Watson (‘Global Alternatives Survey’) shows that North America continues to be the largest destination for investment in alternative assets (50%), with illiquid credit and infrastructure being the only asset classes where more capital is invested in Europe. Overall, 37% of alternative assets are invested in Europe and 8% in Asia Pacific, with 5% being invested in the rest of the world.
Pension fund assets represent a third (34%) of the top 100 alternative managers’ assets. “The alternative asset management industry continues to be remarkably reliant on pension fund money,” comments Luba Nikulina, Global Head of Manager Research at Willis Towers Watson. On second spot come wealth managers (19%), followed by insurance companies (10%), sovereign wealth funds (6%), banks (2%), funds of funds (2%) and endowments & foundations (2%). Nikulina highlights that the share of, in particular, insurance companies and sovereign wealth funds is picking up, which can be explained by the fact that they are increasingly “seeking true diversity and making their portfolios more robust in the face of the increasingly volatile and uncertain macroeconomic environment.”
According to the research, Macquarie Group is the largest infrastructure manager with over $95 billion and tops the overall rankings, while Blackstone is the largest private equity manager with over $94 billion and the largest real estate manager with also almost $94 billion. Bridgewater Associates is the largest hedge fund manager with $88 billion and Blackstone is the largest funds of hedge funds (FoHF) manager with almost $68 billion. Goldman Sachs is the largest private equity funds of funds (PEFoF) manager with almost $45 billion and M&G Investments is the largest illiquid credit manager with over $33 billion. PIMCO is the largest commodities manager with $10 billion, the largest manager of real assets is TIAA with over $7 billion and LGT Capital Partners is the largest manager of Insurance-linked investments.
The largest UK-based alternative asset manager is Man Group, with an asset base of more than $51 billion, followed by Aviva Investors, with asset under management of nearly $46 billion. Both players rank in the top 25 globally, which overall is dominated by US-headquartered corporates.
Of the top 100 alternative investment managers, real estate managers have the largest share of assets (34% and over $1.2 trillion), followed by hedge funds (21% and $755 billion), private equity fund managers (18% and $640 billion), private equity funds of funds (12% and $420 billion), funds of hedge funds (6% and $222 billion), infrastructure (5%) and illiquid credit (5%).
“The shift away from equities and bonds into alternatives has gained momentum, among most institutional investors around the world, as these strategies have helped to manage risk through diversity. Persistent economic uncertainty coupled with highly volatile conditions is likely to reinforce this trend. What is certain is that while the asset management industry as a whole faces some existential questions on whether it has delivered on its promises and how to improve its value proposition in the future, the best asset managers will continue to innovate and capture investment opportunities the volatile macro conditions produce and deliver that value to investors,” concludes Nikulina.