Total assets managed by the Top 100 alternative investment managers globally reached $3.3 trillion in 2013 ($3.1 trillion in 2012), according to research produced by Towers Watson and published in conjunction with the Financial Times. The Global Alternatives Survey, which covers seven asset classes and seven investor types, shows that of the Top 100 alternative investment managers, real estate managers have the largest share of assets (31% and over $1 trillion), followed by private equity fund managers (23% and $753 billion), hedge funds (22% and $724 billion), private equity funds of funds (PEFoFs) (10% and $322 billion), funds of hedge funds (FoHFs) (5% and $173 billion), infrastructure (4%) and commodities (2%).
The research, which this year itemises real assets and illiquid credit for the first time, also includes the top-ranked managers, by assets under management (AuM), in each area. Data from the broader survey shows that total global alternative AuM is now $5.7 trillion and is split between the asset classes in broadly similar proportions to the Top 100 alternative investment managers, with the exception of real estate, which falls to 24% and hedge funds which increases to 27% of the total.
Craig Baker, global Chief Investment Officer at Towers Watson, said: For almost all of the past eleven years of this research we have seen increasing allocations to alternative assets by a wide range of investors. Not only has the appeal of alternative assets broadened to include many more insurers and sovereign wealth funds, but the range of alternative assets has also increased beyond the likes of hedge funds and infrastructure to include real assets, illiquid credit and commodities. It is therefore not surprising that allocations to alternative assets by pension funds, for example, now account for around 18% of all pension fund assets globally, up from 5% fifteen years ago.
The research - which includes data on a diverse range of institutional investor types - shows that pension fund assets represent a third (33%) of the Top 100 alternative managers assets, followed by wealth managers (18%), insurance companies (9%), sovereign wealth funds (6%), banks (3%), funds of funds (3%) and endowments and foundations (3%).