Fri, Apr 28, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Alternative assets industry hits $6tn in AUM for the first time

Tuesday, January 21, 2014
Opalesque Industry Update - Preqin has launched its 2014 Global Alternatives Reports, which reveal the global alternatives industry has shown significant growth in assets held by private equity, hedge fund, real estate and infrastructure fund managers. This is following a year of improving exit environments, strong performance and increased fundraising levels, all stemming from even greater appetite for alternatives from investors; more than 80% of investors in each asset class felt their investments had either met or exceeded expectations over the previous 12 months, and over 30% intend to increase their allocations over the next 12 months.

Key Findings from the 2014 Global Alternatives Reports:

Private Equity – A Need for Cautious Optimism:

  • Total private equity assets under management stand at $3.5tn as of June 2013 (including private real estate and infrastructure funds), up from $3.2tn as of June 2012.
  • 2013 saw the largest amount of capital raised since the global financial crisis, with private equity funds raising $454bn, but only 7% was raised from first-time fund managers, the lowest proportion ever recorded.
  • 71% of investors in private equity intend to commit to their next private equity fund within the next year.

Hedge Funds – An Improving Outlook by Investors:

  • The hedge fund industry saw the highest growth in assets over the last year compared to other alternative assets, from $2.30tn to over $2.66tn, as a result of strong investment gains and new asset flows.
  • Institutional investor capital now represents 66% of all hedge fund capital, with all major groups of institutional investors increasing their hedge fund allocations between 2012 and 2013.
  • Hedge funds posted returns of 11.08% over 2013, but despite lagging the S&P 500 Index, 84% of investors stated that returns had met or exceeded expectations, the highest level recorded by Preqin.

Real Estate – Confidence Returning:

  • Following the strongest fundraising year for the real estate industry since the global financial crisis, industry assets stand at $657bn as of June 2013, up from $576bn as of June 2012.
  • Real estate was the best performing asset class in public pension funds’ portfolios over the three years to June 2013, posting average returns of 13.7% and surpassing the average 13.6% returns on listed equities.
  • 31% of institutional investors in real estate are looking to increase their allocations to the asset class over the next 12 months, with only 5% intending to reduce their exposure.

Infrastructure – A Maturing Asset Class:

  • Industry assets are at a record high of $244bn as of June 2013, up from $210bn a year before.
  • 46% of institutional investors in infrastructure are looking to increase their allocations to the asset class over the next 12 months, a larger proportion than in any other alternative asset class.
  • Of institutional investors looking to make investments in infrastructure throughout 2014, 43% expect to allocate $100mn or more.

Comment:

“The alternative assets industry is now valued at over $6 trillion, according to Preqin’s latest estimates, and all signs indicate this figure will continue to grow. In speaking with investors, we have found that many institutions not only have significant allocations to the private equity, hedge fund and real assets sectors, but many are looking to invest even more capital in these asset classes in the near future. Performance has been a key component of this growth. The alternative assets industry has continued to demonstrate it can offer superior long-term risk-adjusted performance for investors, as well as offering key diversification opportunities or reducing volatility. With the fundraising environment in 2013 indicating the strong demand investors have for these investments, coupled with the positive intentions gleaned from speaking with investors, Preqin anticipates even further growth for the alternative assets industry throughout 2014.”

Mark O’Hare – CEO, Preqin

Preqin

Press Release

BM

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: Ex-Man manager combines sustainable investing with AI/ML[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Dr. Richard Bateson, quant fund manager and physicist, has recently

  2. Hedge funds holding Puerto Rico bonds are looking at a long battle[more]

    Komfie Manalo, Opalesque Asia: Hedge funds which bought Puerto Rico's distressed debt bonds are facing the prospect of a long road ahead to recover their investments as the Caribbean island is attempting to use a U.S. Congress-approved rule that allows it to exploit a bankruptcy-like proceedings

  3. Other Voices: "Winner-take-all" dynamics and hedge fund investing[more]

    A growing stream of thinking in microeconomics is the concept of "winner-take-all" dynamics. The idea seems simple. A combination of networking economics and classic economies of scale creates situations where there are just a few dominant firms or economic agents who are able to capture significant

  4. Investing - How Chipotle's comeback attracted big data robots and value investors alike[more]

    From Forbes.com: When William Ackman's ailing hedge fund Pershing Square Capital Management bet $1 billion on shares in Chipotle Mexican Grill beginning in July 2016, the stakes couldn't have been higher. Pershing Square was reeling from what would eventually be a near $4 billion loss in drugmaker V

  5. Service Providers - Colemore launches fee tracking service for limited partners[more]

    Following Colmore's successful launch in January 2017, the firm has announced the launch of FAIR.. FAIR is designed to help private equity investors independently validate fees and incentives charged by underlying managers, saving time and providing an extra level of comfort. There is a glob