Assets under management (AUM) among the world's largest 500 asset management firms has fallen for the first time since 2011, but the popularity of alternative assets has increased significantly, a new report has shown.
Research conducted by Pensions & Investments and Willis Towers Watson has shown total AUM for the largest 500 firms declined 1.7 per cent in 2015, down to US$76.7 trillion from US$78.1 trillion the year before.
"North American firms’ AUM were US$44.0 trillion at the end of 2015, a decrease of 1.1 per cent from the previous year, while assets managed by European managers, including the U.K., decreased by 3.3 per cent, to US$25.1 ," Willis Towers Watson said.
Equity and fixed income still comprise a majority of all AUM at 45.4 per cent and 32.8 per cent of total AUM respectively, but Willis Towers Watson noted their combined volume had declined 7.1 per cent through 2015.
"The only stand-out category in terms of growth in 2015 is alternative assets, which grew by 25.1 per cent," the company said.
Willis Towers Watson Australian head of manager research Dania Zinurova said the increasing popularity of alternative assets indicated that investors were looking for new ways to generate returns under current investment conditions.
“The increase in alternative assets shows that in an environment of low returns and increased uncertainty, investors are under pressure to identify other means of achieving more diversity and higher returns," she said.
"This shift in strategy is both welcome and essential if the investment industry is to adapt to meet its current and future challenges."