Total global alternative assets under management reached $5.7 trillion in 2013, up from $5.1 trillion in 2012 according to a report from risk assessment and consultancy firm Towers Watson.
The report includes a list of the top 100 largest alternative investment managers by assets under management. Together, the top 100 organisations managed $3.3 trillion in 2013, up from $3.1 trillion in 2012.
In terms of private equity secondaries, the report showed the secondary market was expected to continue to mature and grow in prominence, with primary fund investing becoming just one of many tools used to gain private equity exposure.
Of the top 100 alternative investment managers, real estate managers have the largest share of assets holding more than $1 trillion, or 31 percent of global assets under management. The Blackstone Group, UBS Global Asset Management and AXA Real Estate lead the asset class, although none have closed a real estate secondaries fund in the last year.
Private equity fund managers followed, managing a total of $753 billion, or 23 percent of global assets. The Goldman Sachs Group, TPG Capital and Kohlberg Kravis Roberts lead the asset class. Private equity assets include secondaries funds for managers like Goldman Sachs, which closed its most recent secondaries fund last year on $3.4 billion, shy of its $5 billion.
Hedge funds closely follow private equity funds, managing roughly 22 percent of global assets under management, while private equity fund of funds, fund of hedge funds and commodities lag, each managing less than 10 percent of global assets.
Infrastructure fund managers also lag, however one group leads the top 100 list. Sydney-based Macquarie Group manages $96.34 billion of assets. Last month, Macquarie told Secondaries Investor it believed infrastructure secondaries was picking up, fuelled in part by the disposal of pre-credit crunch private equity fund stakes and assets that have left investors disappointed.
The increase in total assets under management reflects investors’ increased allocations to alternative asset managers, according to Towers Watson global chief investment officer Craig Baker. Roughly 18 percent of global pension fund assets are now allocated to alternative assets, compared to just 5 percent about 15 years ago. Insurers, foundations and endowments and sovereign wealth funds have also increased their allocations, Baker explained.
“Throughout the crisis, investors continued to move away from simply holding equities as their main growth asset and to make greater use of alternative assets and we expect this to continue in the future,” Baker said.