Assets of Top 100 Alternative Asset Managers Hit $3 trillion

Total assets managed by the top 100 alternative investment managers globally reached $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 followed by direct private equity fund managers. The research also includes the top ranked managers, by assets under management, in each area.

PRESS RELEASE

Total assets managed by the Top 100 alternative investment managers globally reached $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 (34% and over $1.0 trillion) followed by direct private equity fund managers (23% and $717bn), direct hedge funds (20% and $612bn), private equity funds of funds (PEFoFs) (10% and $315bn), funds of hedge funds (FoHFs) (6% and $176bn), infrastructure (4%) and commodities (4%). The research 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 $5.1 trillion and is split between the asset classes in similar proportions to the Top 100 alternative investment managers, with the exception of real estate which falls to 26% and direct hedge funds which increases to 26% of the total.

Craig Baker, global head of investment research at Towers Watson, said: “For almost all of the past ten 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 insurers and sovereign wealth funds, but the range of alternative assets has also increased beyond the likes of real estate and private equity to include direct hedge funds, infrastructure and commodities. It is therefore not surprising that allocations to alternative assets by pension funds, for example, now account for around 19% of all pension fund assets globally, up from 5% fifteen years ago.”

The research – which includes a diverse range of institutional investors – shows that pension fund assets represent over a third (36%) of the Top 100 alternative managers’ assets, followed by wealth managers (19%), insurance companies (9%), sovereign wealth funds (6%), banks (5%), funds of funds (3%) and endowments & foundations (2%).

Craig Baker said: “Pension funds have always been and will remain a very large investor group for top alternatives managers, but the demand from non-pension fund investors, such as insurers, endowments & foundations and sovereign wealth funds, is only going to increase in the future.”

The research shows that for the Top 100 managers, North America continues to be the largest destination for alternative capital (46%), with infrastructure as the only exception where more capital is invested in Europe. Overall, 37% of alternative assets are invested in Europe, 10% in Asia Pacific with 7% being investing in the rest of the world.

In a ranking of Top 100 asset managers by pension funds, these assets increased by around 8% from the year before to reach $1.3 trillion. Real estate managers continue to have the largest share of pension fund assets with 39%, followed by PEFoFs (20%), private equity (14%), hedge funds (9%), infrastructure (9%), FoHFs (7%) and commodities (1%). Comparing on a like-for-like basis, pension fund assets managed by infrastructure managers, private equity managers and PEFoFs managers increased by 14%, 12% and 7% respectively. During the same period, pension fund assets managed by the top FoHFs and hedge fund managers grew by 13% and 12% respectively during 2012. Pension fund assets managed by real estate managers declined by 3% during 2012.

Craig Baker said: “We continue to see pension funds globally putting their faith in alternatives assets to help deliver more reliable risk-adjusted returns at the total fund level, as evidenced by the growth, significant in some instances, in all but one of the asset classes. Further to the increased acceptance of alternative assets in their portfolios, we expect pension funds to continue making larger allocations, and to access these assets differently. In particular we expect a continuing shift towards investing via individual managers rather than funds of funds – particularly in hedge funds and private equity – as these managers improve their structures and are seen as a more efficient implementation route than fund of funds vehicles.”

Data from the wider survey shows that at the end of 2012 the top 25 managers of wealth management assets managed $426bn, followed by the top 25 managers of insurance company assets ($244bn); the top 25 managers of bank assets ($160bn); the top 25 managers of sovereign wealth assets ($154bn); the top 25 managers of fund of fund assets ($118bn); and the top 25 managers of endowment and foundation assets ($72bn).

Craig Baker said: “The on-going economic uncertainty is likely to encourage investors away from simply holding equities as their main growth asset and towards a greater use of alternative assets. We think the effort to diversify in this way is worthwhile, but investors need to be cautious about choosing the best and most efficient vehicles, not forgetting the increasing number of cheaper and lower governance routes for improving investment efficiency, such as using Smart Beta.”

According to the research, Macquarie Group is the largest infrastructure manager with around $95bn and tops the overall rankings, while CBRE Global Investors ($80bn) is still the largest real estate manager. Goldman Sachs & Co. is the largest private equity manager in the ranking on $68bn, with AlpInvest Partners as the top PEFoF with $44bn. Blackstone Alternative Asset Management is the largest FoHF with $45bn, while Bridgewater Associates is the largest hedge fund with $84bn. BlackRock is the largest commodities manager with $74bn.
The top 25 ranking
Position
Name of parent organisation
Main country of domicile
Total AuM
(USD million)
Asset Class
1
Macquarie Group
Australia
94,845.70
Direct Infrastructure Funds
2
Bridgewater Associates
United States
84,042.00
Direct Hedge Funds
3
CBRE Global Investors
United States
80,000.00
Direct Real Estate Funds
4
BlackRock
United Kingdom
74,000.00
Direct Commodities Funds
5
Goldman Sachs & Co.
United States
68,000.00
Direct Private Equity Funds
6
AXA Real Estate
France
65,453.46
Direct Real Estate Funds
7
Brookfield Asset Management
Canada
65,163.00
Direct Real Estate Funds
8
UBS Global Asset Management
United Kingdom
65,036.61
Direct Real Estate Funds
9
Blackstone Capital Partners
United States
57,090.00
Direct Private Equity Funds
10
TPG Capital
United States
54,526.00
Direct Private Equity Funds
11
The Carlyle Group*
United States
53,338.00
Direct Private Equity Funds
12
Blackstone Real Estate Partners
United States
50,427.10
Direct Real Estate Funds
13
Deutsche Asset & Wealth Management
United States
48,727.00
Direct Real Estate Funds
14
LaSalle Investment Management
United States
47,700.00
Direct Real Estate Funds
15
Kohlberg Kravis Roberts
United States
45,200.00
Direct Private Equity Funds
16
Blackstone Alternative Asset Management
United States
44,812.07
Funds of Hedge Funds
17
AlpInvest Partners
The Netherlands
44,029.50
Private Equity FoF
18
Credit Suisse Asset Management
United States
41,907.80
Direct Real Estate Funds
19
Morgan Stanley
United States
41,271.00
Direct Real Estate Funds
20
Oaktree Capital Management
United States
41,208.50
Direct Private Equity Funds
21
Cornerstone Real Estate Advisers
United States
41,016.60
Direct Real Estate Funds
22
Brevan Howard
United Kingdom
39,915.62
Direct Hedge Funds
23
Goldman Sachs Asset Management
United States
39,196.70
Private Equity FoF
24
Warburg Pincus
United States
38,169.00
Direct Private Equity Funds
25
Prudential Real Estate Investors
United States
38,133.00
Direct Real Estate Funds

* Figure obtained from the Global Billion Dollar Club, published by HedgeFund Intelligence.

Notes to editors
Towers Watson conducted this survey for the year to December 2012 to rank the largest alternative investment managers and includes 578 investment manager entries comprising: 90 in real estate, 71 in fund of hedge funds, 58 in private equity fund of funds, 175 hedge funds, 87 private equity, 62 in infrastructure and 35 in commodities. For real estate, commodities and infrastructure, individual managers are included. The majority of the data (533 entries) comes directly from investment managers with the remainder coming from publicly available sources. Certain individual hedge fund information was sourced from the Global Billion Dollar Club, published by HedgeFund Intelligence. All figures are in US$.

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