Infrastructure and real estate investment managers dominate the Australian alternatives scene with the largest share of assets, according to the Towers Watson Global Alternatives Survey.
Local investors’ desire to diversify away from and reduce their reliance on equities had resulted in strong assets under management in the alternatives space, Towers Watson director of investment services in Australia Graeme Miller told InvestorDaily.
“Alternative investments continue to grow and indeed are becoming an increasingly important part of portfolios,” Miller said.
“This is a trend we’re seeing in Australia and quite clearly the survey demonstrates that this is one that is applicable globally as well.”
The survey, conducted for the year to December 2011, covered 493 managers in seven asset categories: real estate, fund of hedge funds, private equity fund of funds, hedge funds, private equity, infrastructure and commodities.
It studied the domicile of the major investment managers and revealed 15 of the top Australian managers had been dominated by infrastructure and real estate managers.
Macquarie Group totalled US$88.6 billion in infrastructure, followed by Goodman at US$19.1 billion in real estate and AMP Capital Investors at US$15.7 billion in real estate.
“That shows that in both of those asset classes, Australian super funds have been more prepared to be early adopters than their global peers; particularly in infrastructure, Australia has been a pioneer,” Miller said.
Within the top 25 global managers, Australia ranked third, with Macquarie Group and another three Australian alternative managers in the top 100.
The combined global total of alternative investment assets under management is now US$4.9 trillion, with the top 100 managers alone exceeding US$3 trillion.
Miller said it was likely the other alternative asset classes would grow as superannuation fund balances became larger and contributions flowed.
“Investors will be naturally looking for a home for that money and many of them will be wary about expanding their exposure to equities, although the business models of private equity and hedge funds proved to have some stresses during the global financial crisis (GFC),” he said.
He said the successful private equity and hedge fund managers going forward would be those that could evolve their business model to overcome the disadvantages presented throughout the GFC.
“We are definitely seeing very little growth in the fund-of-fund model. Fund of hedge funds have declined in importance as have funds of private equity funds,” he said.
CBRE Global Investors is the largest real estate manager with US$94 billion and tops the overall rankings, displacing last year’s leader, Macquarie Group, at US$89 billion, which is still the largest infrastructure manager.
The Carlyle Group is the largest private equity manager at US$91 billion and AlpInvest Partners enters the table for the first time as the top private equity fund of fund with US$41 billion.
Blackstone Alternatives Asset Management is the largest fund of hedge fund with US$39 billion, while Bridgewater Associates is the largest hedge fund with US$76 billion. BlackRock is the largest commodities manager with US$77 billion.
