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January 27, 2016 at 09:36 AM
The global coffers of alternatives fund managers swelled to a record $7.4 trillion in 2015, up from $6.9 trillion in 2014, Preqin, the alternatives data provider, reported Tuesday.
The private capital industry, in particular, grew over the past year, with assets under management standing at $4.2 trillion as of June.
The overall sector added $193 billion in in assets under management in the first half, more than the $149 billion growth in the whole of 2014.
For purposes of the report, private capital refers to all closed-end alternative assets funds, including private equity, private debt, private real estate, infrastructure and natural resources.
Combined hedge fund assets under management grew to $3.2 trillion from $3 trillion in 2014, despite a challenging year for performance.
“The private capital industry has continued to show healthy growth over the past year,” Preqin’s chief executive, Mark O’Hare, said in a statement.
“This has been fueled by a rise in dry powder levels, following another strong year for fundraising, and an increase in the unrealized value of portfolio assets.”
At the same time, he noted, fundraising was becoming ever more competitive, and as dry powder levels increased, they put pressure on finding attractive investments.
“The hedge fund industry has not enjoyed the same gains made in 2013 and 2014, although it has nevertheless grown to well over three trillion dollars,” O’Hare said.
“While the prolonged period of weak returns has taken its toll, returns are also difficult to find in other asset classes. 2016 looks set to be a challenging year, but the industry still has the potential for significant further growth.”
Private Equity
Private equity assets under management hit a new high of $2.4 trillion in June 2015.
Preqin said new commitments were prompted by robust distributions from funds: a record $475 billion in 2014, and a further $189 billion in the first half of 2015.
