Pension Funds Drive Growth Of Alternative Assets

Jun 27 2008 | 10:57am ET

Last year, alternative assets managed on behalf of pension funds by the world’s largest 99 investment managers grew by 40% to US$822 billion from US$586 billion in 2006.

According to research by Watson Wyatt and Global Investor magazine, over half the top 99 managers are based in the U.S., while over a third are based in Europe. Real estate managers lead the ranking, occupying the top nine positions and accounting for 62% of the assets. Infrastructure and commodities remain smaller, but growing alternatives classes among pension funds with the top 10 managers in these areas being responsible for US$43bn and US$16bn of assets respectively.

Data from the survey showed that, at the end of 2007, the top 50 managers within the areas of real estate, fund of hedge funds and private equity fund of funds managed US$512 billion, US$146 billion and US$139 billion respectively.

Roger Urwin, global head of investment consulting at Watson Wyatt, said the movement of assets into alternatives has continued unabated despite the high fees and costs and the mixed ability of managers to deliver good performance.

“The trends we see are: more need for transparency, particularly the separate identification of alpha and beta; an increased focus on risk; and the increased appetite for direct investment in private equity and hedge funds,” he said.

In terms of managers included within the survey, AEW Capital Management is the largest real estate manager of pension fund assets in the world with US$47.4 billion, while HarbourVest Partners tops the p.e. fund of funds with US$20.1 billion. The survey also reveals that Blackstone Alternative Asset Management manages the largest proportion of fund of hedge fund assets on behalf of pension funds, with a total of US$15.4 billion.


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Demeter: Family affair

David and James Hamman launched their fundamental Livestock and Grains Program in March of 2010 but it really was decades in the making.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.