Key Takeaways
- • The top 100 alternative investment managers globally manage USD 3.5 trillion in assets as of 2014, up from USD 3.3 trillion in 2013, according to Towers Watson's Global Alternatives Survey.
- • Real estate dominates the alternative asset allocation among the top 100 managers, representing 33% of assets (over USD 1 trillion), followed by hedge funds at 23% (USD 791 billion) and private equity at 22% (USD 767 billion).
- • The broader alternative investment universe across 623 managers totals USD 6.3 trillion globally, with hedge funds increasing to 27% of total assets when measured across all participants, while real estate declines to 23%.
- • Traditional distinctions between alternative asset classes are blurring as institutional investors increasingly focus on underlying return drivers rather than asset class categorization, with alternatives now considered "bread and butter" investments alongside bonds and equities.
- • Private equity funds of funds, funds of hedge funds, infrastructure, and illiquid credit collectively represent 22% of the top 100 managers' alternative assets under management.
Summary
The top 100 alternative investment managers globally now manage USD 3.5 trillion in assets, reflecting continued institutional demand for alternative investments beyond traditional fixed income and equities. This figure, reported through Towers Watson's Global Alternatives Survey covering nine asset classes and seven investor types, represents growth from USD 3.3 trillion in 2013. The research underscores the scale and maturity of the alternative investment sector at the institutional level.
Real estate commands the largest allocation within the top 100 alternative managers, accounting for 33% of assets or over USD 1 trillion under management. Hedge funds follow with 23% of assets (USD 791 billion), while private equity fund managers hold 22% (USD 767 billion). The remaining allocation is distributed across private equity funds of funds (10%, USD 342 billion), funds of hedge funds (5%, USD 214 billion), infrastructure (4%), and illiquid credit (3%). This composition reflects institutional investor appetite across multiple alternative asset classes simultaneously.
When examined across the broader universe of 623 alternative managers globally, total assets reach USD 6.3 trillion, up from USD 5.7 trillion in 2013. The asset class distribution shifts slightly in this broader sample, with hedge funds increasing to 27% of total assets while real estate falls to 23%, suggesting that smaller alternative managers hold relatively higher concentrations in hedge funds compared to the largest tier.
Luba Nikulina, global head of investment manager research at Towers Watson, characterized the evolution of the alternative investment sector, noting that institutional investors are increasingly viewing alternatives as core holdings rather than supplementary strategies. The traditional boundaries separating distinct alternative asset classes have become less meaningful, as sophisticated investors focus on underlying economic return drivers and risk characteristics rather than categorical labels. This mainstreaming of alternative investments reflects a fundamental shift in how institutional capital is allocated across the investment spectrum.
Real estate commands the largest allocation within the top 100 alternative managers, accounting for 33% of assets or over USD 1 trillion under management. Hedge funds follow with 23% of assets (USD 791 billion), while private equity fund managers hold 22% (USD 767 billion). The remaining allocation is distributed across private equity funds of funds (10%, USD 342 billion), funds of hedge funds (5%, USD 214 billion), infrastructure (4%), and illiquid credit (3%). This composition reflects institutional investor appetite across multiple alternative asset classes simultaneously.
When examined across the broader universe of 623 alternative managers globally, total assets reach USD 6.3 trillion, up from USD 5.7 trillion in 2013. The asset class distribution shifts slightly in this broader sample, with hedge funds increasing to 27% of total assets while real estate falls to 23%, suggesting that smaller alternative managers hold relatively higher concentrations in hedge funds compared to the largest tier.
Luba Nikulina, global head of investment manager research at Towers Watson, characterized the evolution of the alternative investment sector, noting that institutional investors are increasingly viewing alternatives as core holdings rather than supplementary strategies. The traditional boundaries separating distinct alternative asset classes have become less meaningful, as sophisticated investors focus on underlying economic return drivers and risk characteristics rather than categorical labels. This mainstreaming of alternative investments reflects a fundamental shift in how institutional capital is allocated across the investment spectrum.
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