The Global Alternatives Survey, published in conjunction with the Financial Times, covered 100 of the top global alternative investment managers, as well as a broader study of the whole alternatives universe. It found that the top 100 firms now account for $3.1 trillion of assets under management.
Of those firms surveyed, the study found real estate managers have the largest share of assets, with over $1.0 trillion of funds under management (34 per cent). This was followed by direct private equity fund managers with $717 billion (23 per cent). Infrastructure and commodities were down at the bottom of the list, with around $100 billion (4 per cent each).
“Global investors continue their search for yield and accordingly maintain their strong interest in real estate. We [are] also seeing increasing interest in infrastructure as an asset class and some investors view listed infrastructure as a proxy to direct investing, ” Hugh Dougherty, senior investment consultant and head of manager research at Towers Watson in Australia said.
Nineteen Australian managers featured in the top 100, with a total of US$240 billion under management. This included firms such as Macquarie Group, AMP Capital Investors and Industry Funds Management.
The research also showed that pension fund assets represent over a third (36 per cent) of all assets, followed by wealth managers (19 per cent) and then insurance companies (9 per cent).
North America is the largest destination for alternative capital investments (46 per cent), with Europe not far behind, with 37 per cent of all alternative assets invested there.
The research found that globally, alternatives are now worth $5.1 trillion, with a majority of funds being invested in either real estate (26 per cent) or in direct hedge funds (also 26 per cent).
In terms of the vehicles, globally, pension funds had the most funds under management with around $1.8 trillion, followed by wealth managers with just under $1 trillion and then insurance firms with $411 billion.
Towers Watson believes the increase in assets is likely to put further downward pressure on costs and fees.
“With the arrival of the MySuper regulation there is also a lot of pressure to reduce the costs of managing superannuation funds and this is driving these funds to review their existing fee structures or find more cost-effective investment solutions,” Mr Dougherty said.
“Ongoing 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.”
