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July 17, 2017 at 12:05 PM
The coffers of the world 100 biggest alternative asset managers swelled to $4 trillion in 2016, a 10% increase over the previous year, Willis Towers Watson reported Monday.
Overall alternative assets under management stood at some $6.5 trillion across 562 managers surveyed, with North America the main destination for 54% of allocations, followed by 33% in Europe and 6% in Asia/Pacific.
The annual WTW survey seeks to capture long-term institutional investment trends by seven main investor groups across 10 alternative asset classes.
The data for 2016 showed that among the top 100 managers, real estate managers had a 35% share of assets, more than $1.4 trillion, followed by:
- Private equity fund managers: 18%, $695 billion
- Hedge funds: 17%, $675 billion
- Private equity funds of funds: 12%, $492 billion
- Illiquid credit: 9%, $360 billion
- Funds of hedge funds: 6%, $228 billion
- Infrastructure: 4%, $161 billion
- Commodities: 1%, $21 billion
According to the research, pension funds represented 33% of assets allocated to the top 100 alternative managers. Wealth managers followed with 15%; insurance companies with 12%; sovereign wealth funds with 5%; and endowments and foundations, banks and funds of funds each with 2%.
“Although the alternative asset manager universe continues to be dominated by pension fund assets, as solutions have continued to evolve that are better aligned to investor needs and incorporate lower cost structures, we have seen growing interest from other investor groups such as insurers looking to lock in alpha opportunities presented by continued volatility,” WTW’s global head of manager research Luba Nikulina said in a statement.
Pension fund assets managed by the top 100 alternative asset managers in the sector amounted to $1.6 trillion in 2016, up 9% from the 2015 study.
Real estate strategies remained pensions’ the most popular alternative asset class, with 41% of assets, followed by private equity, with 18%. At the same time, illiquid assets’ share this year double to 8%.
A recent study found that U.S. private equity continues to attract investors.
U.S. alternative asset managers occupied 68 spots in this year’s ranking of the 100 largest managers. Bridgewater Associates and AQR Capital Management were the biggest managers in direct hedge funds, with $116.8 billion and $69.2 billion.
