Top 100 Alternatives Managers Top $3 Trillion

Total assets managed by the Top 100 global alternative investment managers (by AUM size) reached $3.1 trillion in 2012, according to research by  Towers  Watson  and  published  in  conjunction with the Financial Times.

The 97-page    Global    Alternatives    Survey covered seven asset classes (see below) with real estate accounting  for  a  third  of  AUM.  Hedge  funds,  both direct and via fund of hedge funds, accounted for 26%.

The  report  notes  several  key  trends  within  the hedge funds sector.  They include:

• Institutional investors want their hedge fund allocations  to offer low correlation  to traditional markets, greater transparency, appropriate liquidity, alignment and appropriate fees.

•  While larger hedge fund managers are generally perceived to be safer from a business risk perspective, investors are increasingly allocating to  more  modestly  sized  managers  that  have proven alpha generation.

•  Only a small number of FOHFs offer credible capacity so further consolidation is expected. FOHFs  are  increasingly  working  with  investors in a customised matter.

Data from Towers’ broader survey shows that total global  alternative  AUM  is  now  $5.1 trillion  and  is split  between  the  asset  classes  in  similar proportions  to the  Top  100 alternative  investment managers,  with the exception  of real estate which falls to 26% and direct hedge funds which increases to 26% of the total.

The research included a diverse range of institutional investors.  Pension  fund  investors represent  over  a third (36%) of the Top 100 alternative managers’ assets,  followed  by  wealth  managers  (19%), insurance  companies  (9%), sovereign  wealth funds (6%), banks (5%), funds of funds (3%), and endowments & foundations (2%).