ARLINGTON, Va., July 11, 2016 (GLOBE NEWSWIRE) -- Total assets managed by the top 100 alternative investment managers globally reached $3.6 trillion, up 3% from the prior year, according to Willis Towers Watson (NASDAQ:WLTW), a leading global advisory, broking and solutions company. The company’s Global Alternatives Survey, which covers 10 asset classes and seven investor types, shows that of the top 100 alternative investment managers, real estate managers have the largest share of assets (34% and over $1.2 trillion), followed by hedge funds (21% and $755 billion), private equity fund managers (18% and $640 billion), private equity funds of funds (PEFoFs) (12% and $420 billion), funds of hedge funds (FoHFs) (6% and $222 billion), infrastructure (5%) and illiquid credit (5%).
The research also lists the top-ranked managers in each area by assets under management (AuM). Data from the broader survey (all 602 entries) show that total global alternative AuM is now $6.2 trillion. For the first time, the level of assets in insurance-linked investments is around $30 billion, of which almost two-thirds is invested in Europe, by 13 asset managers.
“Institutional investors continue to focus on diversity but not cost,” said Brad Morrow, head of manager research, North America, Willis Towers Watson. “While inflows into alternative assets continue apace, investors have become more mindful of alignment of interests and getting value for money. This has contributed to a further blurring between individual asset classes as investors increase their focus on underlying return drivers with the ultimate objective of achieving true diversity and making their portfolios more robust in the face of the increasingly volatile and uncertain macroeconomic environment.”
The research, which includes data on a diverse range of institutional investor types, shows that pension fund assets represent a third (34%) of the top 100 alternative managers’ assets, followed by wealth managers (19%), insurance companies (10%), sovereign wealth funds (6%), banks (2%), funds of funds (FoFs) (2%), and endowments and foundations (2%).
“The alternative asset management industry continues to be remarkably reliant on pension fund money and has earned a position of trust by delivering diversified returns via some of the most highly skilled investment teams around,” said Morrow. “However, there’s an ever-increasing demand for more alignment and lower cost. Achieving this would have a positive knock-on effect for managers attracting assets from other investors, such as insurers and sovereign wealth funds, wanting to make the most of market volatility and associated alpha opportunities, particularly given the current lack of clear beta opportunities.”
The research shows, among the top 100 managers, that North America continues to be the preferred destination for investment in alternative assets (50%), with illiquid credit and infrastructure being the only asset classes where more capital is invested in Europe. Overall, 37% of alternative assets are invested in Europe and 8% in Asia Pacific, with 5% throughout the rest of the world.
Pension fund assets, managed by the top 100 asset managers of pension funds, increased again from the year before to reach almost $1.5 trillion. Real estate managers continue to have the largest share of pension fund assets with 40%, followed by PEFoFs (20%), hedge funds (10%), private equity (9%), infrastructure (8%), FoHFs (7%) and illiquid credit (4%).
“There’s an increasing profusion of choice for institutional investors wishing to diversify their portfolios,” said Morrow. “A typical example of this is the increasing number of alternative beta strategies outside of the traditional hedge fund structure available for significantly lower fees and with much better alignment. There’s also continued interest and more options available in real estate, infrastructure and other real assets. Illiquid credit, governance permitting, is another alternative way of diversifying sources of return and improving portfolio efficiency as part of both low-risk and return-seeking portfolios.”
The survey shows that at the end of 2015, the top 25 alternative asset managers of wealth management assets managed $476 billion (up 4%), followed by the top 25 managers of insurance company assets ($304 billion, up 1%), the top 25 managers of sovereign wealth fund assets ($173 billion, up 8%), the top 25 managers of bank assets ($100 billion, down 10%), the top 25 managers of FoF assets ($89 billion, down 10%), and the top 25 managers of endowment and foundation assets ($87 billion, up 8%).
The top 25 ranking of alternative asset managers
|Rank||Name of parent organization||Country||AuM (USD millions)||Asset class|
|1||Macquarie Group||Australia||$||95,041.05||Direct infrastructure funds|
|2||Blackstone||United States||$||94,300.00||Direct private equity funds|
|3||Blackstone||United States||$||93,900.00||Direct real estate funds|
|4||Bridgewater Associates||United States||$||88,001.10||Direct hedge funds|
|5||CBRE Global Investors||United States||$||79,800.00||Direct real estate funds|
|6||UBS Asset Management||Switzerland||$||72,953.00||Direct real estate funds|
|7||TIAA||United States||$||72,043.00||Direct real estate funds|
|8||TPG Capital**||United States||$||70,000.00||Direct private equity funds|
|10||The Carlyle Group**||United States||$||63,144.00||Direct private equity funds|
|11||J.P. Morgan Asset Management||United States||$||57,130.40||Direct real estate funds|
|12||Kohlberg Kravis Roberts & Co.||United States||$||55,352.39||Direct private equity funds|
|13||LaSalle Investment Management||United States||$||55,081.00||Direct real estate funds|
|14||Principal Global Investors||United States||$||53,486.65||Direct real estate funds|
|15||AXA Investment Managers||France||$||52,846.98||Direct real estate funds|
|16||Man Group||United Kingdom||$||51,419.00||Direct hedge funds|
|17||AQR Capital Management||United States||$||50,996.06||Direct hedge funds|
|18||Brookfield Asset Management||Canada||$||49,807.00||Direct real estate funds|
|19||J.P. Morgan Asset Management*||United States||$||49,200.00||Direct hedge funds|
|20||Hines||United States||$||47,548.47||Direct real estate funds|
|21||Aviva Investors||United Kingdom||$||45,759.00||Direct real estate funds|
|22||Deutsche Asset Management||Germany||$||45,381.44||Direct real estate funds|
|23||Cornerstone Real Estate Advisers||United States||$||45,093.40||Direct real estate funds|
|24||Providence Equity Partners**||United States||$||45,000.00||Direct private equity funds|
|25||Och-Ziff Capital Management Group||United States||$||44,600.00||Direct hedge funds|
*Data derived from the Global Billion Dollar Club, published by HedgeFund Intelligence
**Figures show total assets under management, obtained from publicly available sources
“The shift from equities and bonds to alternatives has gained momentum among most institutional investors around the world, as these strategies have helped manage risk through diversity,” said Morrow. “What’s certain is that while the asset management industry as a whole faces some existential questions on whether it has delivered on its promises and how to improve its value proposition in the future, the best managers will continue to innovate, capture opportunities and deliver value to investors.”
According to the research, Macquarie Group is the largest infrastructure manager, with over $95 billion, and tops the overall rankings, while Blackstone is the largest private equity manager, with over $94 billion, and the largest real estate manager, with almost $94 billion. In the ranking, Bridgewater Associates is the largest hedge fund manager, with $88 billion, and Blackstone is the largest FoHF manager, with almost $68 billion. Goldman Sachs is the largest PEFoF manager, with almost $45 billion, and M&G Investments is the largest illiquid credit manager, with over $33 billion. PIMCO is the largest commodities manager, with $10 billion; the largest manager of real assets is TIAA, with over $7 billion, and LGT Capital Partners is the largest manager of insurance-linked investments.
A file archive accompanying this release is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/81d1bf6f-9aee-4d8d-adea-9f1cdf0c3ffe
Notes to editors
Willis Towers Watson conducted this survey for the year to December 2015 to rank the largest alternative investment managers, including 602 investment manager entries comprising 138 in hedge funds, 92 in real estate, 88 in private equity, 58 in FoHFs, 58 in infrastructure, 54 in PEFoFs, 53 in illiquid credit, 26 in commodities, 22 in real assets and 13 in insurance-linked investments. For real estate, commodities and infrastructure, individual managers are included. The majority of the data comes directly from investment managers, with the remainder coming from publicly available sources. Certain individual hedge fund information was sourced from the Global Billion Dollar Club, published by HedgeFund Intelligence.
About Willis Towers Watson Investment
Willis Towers Watson’s Investment business is focused on creating financial value for institutional investors through its expertise in risk assessment, strategic asset allocation, fiduciary management and investment manager selection. It has over 900 associates worldwide, assets under advisory of over $2.3 trillion and around $75 billion of AuM.
About Willis Towers Watson
Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employees in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
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Source:Willis Towers Watson Public Limited Company