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Alternative Market Briefing

Alternatives AUM to jump to $23.21tn in 2026

Friday, January 14, 2022

Laxman Pai, Opalesque Asia:

The growth across alternative assets to accelerate over the next five years giving Assets under management (AUM) total for the major alternative asset classes of $23.21tn in 2026, said a study.

According to a study by Preqin, AUM in private capital grew from $4.08tn at the end of 2015 to $8.90tn at the end of 2021 (an annualized estimate based on data to March 2021), representing a CAGR of 13.9%. This was much faster than the 8.5% CAGR over the preceding five years, and Preqin is forecasting a CAGR of 14.8% between 2021 and 2026, taking private capital AUM to $17.77tn.

"We expect hedge fund AUM to grow more slowly, but a forecast CAGR of 4.2% would see AUM hit $5.44tn in 2026, giving an AUM total for the major alternative asset classes of $23.21tn," it said.

Preqin expects the fastest AUM growth to be in private debt (CAGR of 17.4% between 2021 and 2026) and infrastructure (16.6%), but the engine of growth will be private equity because of its sheer size. "Our model predicts that AUM in the largest of alternative asset classes will increase from $5.33tn in 2021 to $11.12tn in 2026. The 15.9% CAGR is not only above what the industry has enjoyed over the past five years, it's substantially faster than the 10.2% experienced between 2010 and 2020," it said.

The study sees similar growth rates in the three largest regions, with North America growing the fastest with a predicted CAGR of 15.4% between 2021 and 2026, closely followed by......................

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