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Asian institutional investment assets grow 13%

Tuesday, August 05, 2014
Opalesque Industry Update - Assets held by Asian institutions (excluding Japan) grew 13% from Q1 2013 to Q1 2014, according to new research from Greenwich Associates.

Total assets have grown to more than $10 trillion among the 189 institutions interviewed by Greenwich Associates for its 2014 Asian Investment Management Study. A significant proportion of assets are held by institutions in South Korea, China, Hong Kong, Singapore, and Taiwan. Across the region, roughly half of these assets are held by central banks.

"A growing 40% of Asian institutional assets are invested in passive strategies," says Greenwich Associates consultant Abhi Shroff. "Meanwhile, allocations to alternative asset classes including hedge funds, private equity and real estate are on the rise, but these investments are mostly concentrated among Asia's largest institutions."

Asian institutions invest the bulk of their assets directly through in-house staff-as opposed to utilizing external investment managers. Only about 20% of assets are "outsourced" to external managers, a share that rises to 30% if central banks and commercial banks are excluded.

"We expect that Asian institutions will outsource more assets and hire more external investment managers as they continue to diversify their investment portfolios into off-shore asset classes and alternatives," says Abhi Shroff.

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